Raleigh-Cary, NC Federal Housing Finance Agency Home Price Index (FHFA HPI)

In the Raleigh-Cary, NC, Federal Housing Finance Agency (FHFA) house price index for the fourth quarter of 2019, the home equity and home prices both increased from the previous quarter. The home equity index rose from 63.1 to 63.4, while the home price index increased from 225.7 to 226.3.

The FHFA house price indexes are based on sales prices of single-family homes with conforming loan amounts that are owned by Freddie Mac or Fannie Mae and financed through mortgage loans insured or guaranteed by the federal government. The data used to calculate these indexes come from public records and are adjusted for seasonal variation and inflation using the consumer price index for all urban consumers (CPI-U).

In general, when home equity increases, it means that homeowners have built up more equity in their homes – they own a larger share of their home outright and have less debt outstanding on their mortgage loan. Home prices also play a role in determining how much equity a homeowner has in their property; as prices increase, so does the value of a homeowner’s investment. In Raleigh-Cary specifically, both of these factors contributed to an increase in homeowners’ equity during the fourth quarter of 2019.

As we see in other markets across the country, demand for housing continues to outpace supply in Raleigh-Cary which is driving up prices – this is especially true at lower price points where there are more buyers than there are homes available for sale. This competition among buyers is pushing up prices even further and contributing to increases in homeowners’ equity levels as well.