What is an index of house prices?
In the United States, the Index of the House or HPI is a measurement of changes in prices in family houses for a certain period of time. Using information obtained from the highest mortgage creditors, this index indicates whether mortgage prices - both for new buyers and refinancing in their current homes - are rising or falling. The house price index can also be used to show the levels of starting loans and the total availability of houses in the US. It is a tool that is best used in conjunction with other economic factors to get the right image of the housing market. Local prices are often influenced by the national image of housing. For this reason, consumers in the United States need some overview of housing market before they set out to see if they can afford a Loan mortgage. The house price index is an effective tool for this purpose.
Calculation of the Index of the House Price Requires Information from large institutionalElů, whose loans make up most of the mortgages taken to buy home in the US, these creditors, Fannie Mae® and Freddie Mac®, take over information from certain large cities and give information about housing prices as well as the number of refinance and prevent. From this information, HPI is calculated and updated to the half -order.
It is important to understand that the house price index is always measured compared to previous levels. For this reason, it is known as the Chain Price Index. As an example, if it is calculated per month, the current HPI will be considered in terms of levels from the previous month. The rate of change between these two months would indicate whether the prices were Risa falling. Since HPI is created in this way, it gives potential buyers a context for the market they are about to enter.
Of course, housing prices often reflect a wider economic climate. For this reason, it is wise that those who study the housing market, assess the price of the house price in connection with other economic factors. Nationwide interest ratesThey will often have a high impact on the housing market, because these rates are often the basis of the rate offered by mortgage creditors. In addition, the inflation rate should be studied to find out how they accumulate against rising or falling house prices.