San Jose-Sunnyvale-Santa Clara, CA Federal Housing Finance Agency Home Price Index (FHFA HPI)

The San Jose-Sunnyvale-Santa Clara, CA, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index measuring average price changes in single-family houses in the metro area. The HPI is a leading indicator of home equity and home prices in the San Jose area.

Home prices in the San Jose area have been on the rise since 2012, when the HPI bottomed out at 135.9. In the fourth quarter of 2017, the HPI reached 241.6, its highest level since 2008. Home prices are now nearly 80% higher than they were at their trough in 2012.

The increase in home prices has been driven by strong economic growth in the San Jose area. Between 2012 and 2017, employment in Santa Clara County grew by 18%. This growth has led to increased demand for housing and put upward pressure on prices.

The rise in home prices has also been fueled by low interest rates and tight supply conditions. The average 30-year mortgage rate has fallen from 4.5% in 2012 to 3.9% currently. At the same time, there has been little new construction activity to meet rising demand for housing. The combination of these factors has caused home prices to increase more quickly than incomes, making homes less affordable for many buyers