St. Louis, MO-IL Federal Housing Finance Agency Home Price Index (FHFA HPI)

The St. Louis, MO-IL, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index that measures average price changes in repeat sales or refinancings on the same properties. The index covers single-family homes in the nine-county metropolitan statistical area of St. Louis, MO-IL.

Between 2000 and 2006, home prices in the St. Louis metro area more than doubled, increasing 106%. This was one of the largest increases in home prices among all metro areas tracked by the FHFA HPI. However, since 2006 prices have fallen sharply, declining 32% through 2011. This is steeper than the national average decline of 30% over the same period.

As of 2011, the median home price in the St. Louis metro area was $145,000, which is well below the peak median price of $219,000 reached in 2006 but still above the pre-boom level of $131,000 seen in 2000. Home prices are expected to continue to decline through 2012 before beginning a modest recovery in 2013 and 2014.

The sharp increase and subsequent decrease in home prices has had a major impact on homeowners' equity positions. Homeowners with mortgages saw their equity position erode rapidly as home prices fell during and after the housing market crash; by 2011, just over half of all mortgaged homeowners were "underwater" - owing more on their mortgage than their home was worth - compared to less than 10% at the end of 2006 . For many homeowners this has been a devastating blow; not only have they lost much of their investment in their homes but they now find themselves owing more money than their homes are worth should they need or want to sell them .

The situation has been exacerbated by tight credit conditions which make it difficult for many borrowers who are current on their payments to refinance into lower interest rate loans even if they have good credit scores . As a result , many homeowners are effectively trapped in high interest rate mortgages , further eating into any remaining equity they may have .