House Price Index MoM

Both the name and the acronym are federally registered trademarks, and the monthly change is the MoM headline. The Federal Housing Finance Agency (FHFA) publishes it; before fall 2008, the predecessor agency OFHEO published it. Quarterly publication began in March 1996, and the monthly index joined later. The MoM headline uses the flagship Purchase-Only version: seasonally adjusted and nominal, built from Fannie Mae and Freddie Mac purchase data.

It covers repeat sales of the same detached single-family homes with conforming conventional loans since January 1975, drawing on over 100 million transactions. It does not track average prices or rents, and it leaves out condos, multi-unit homes, jumbo loans, and cash sales.

FHFA posts each release at 9:00 a.m. Eastern Time for purchase loans originated in one calendar month. Data lag is about two months because originations take 30 to 45 days to reach funding, plus processing time. Each year brings 8 Monthly Index releases, while 4 add quarterly tables in February, May, August, and November.

Each release brings a report with charts plus downloadable data files, while quarterly releases add state and metro detail. Every release revises past values as repeat deals, seasoned loans, and late data arrive; gains mean appreciation and losses mean depreciation, with no preset thresholds. Market calendars compare the actual print with consensus expectations.

The national headline is built from geographic pieces, not economic drivers; FHFA names no causes.

• Census divisions (9 regions such as Pacific and New England): intermediate aggregates; each averages its states' growth rates.
• States (50 states plus Washington DC): building blocks of divisions and the nation, weighted by detached housing stock.
• Metro, county, ZIP, and tract indexes: local detail that does not feed the national headline.

The first monthly release was published March 25, 2008 for January 2008 data. It showed US prices down 1.1% seasonally adjusted from December and down 3.0% over 12 months. Divisions ranged from -2.9% in New England to +0.1% in Mountain, the only region rising while the nation fell.

Over 12 months they ranged from -9.4% in the Pacific to +1.5% in West South Central. The same table revised December from -0.2% to -0.6%, and the index stood at 218.8, down 4.1% from its April 2007 peak.

The method is a modified Case-Shiller weighted repeat-sales design, estimated in three stages.

1. Assemble repeat sales: collect houses with at least two conforming purchase loans since January 1975; drop condos, multi-unit homes, non-conforming loans, and bad records.

Group sales by month using loan origination date.

1. First stage (OLS, simple averaging): fit typical log price change across sale pairs; gains of 0.030, 0.012, and 0.018 average about 0.020.

The example trio last sold in January and resold in April, a gap of 3 months.

1. Second stage (variance fitting): estimate how price spread grows with time between sales, using interval length without a fixed baseline.
2. Third stage (GLS, variance weighting): re-average giving less weight to long-gap pairs; the example 0.020 becomes about 0.019.

Convert to index with January 1991 as 100: 100 times e (math constant) to the 0.019 gives about 101.92, equal to plus 1.9%.

1. Seasonal adjustment: remove normal calendar patterns with Census X-13 software; the MoM headline uses adjusted values, and both adjusted and unadjusted series are published.
2. Geographic aggregation: chain state growth rates into divisions, then the nation, weighted by each state's detached housing stock.

Weights update yearly from census and survey data.

1. Headline rates: divide the index gain since the prior month (or prior year) by that earlier index.

Index values alone mean little; only ratios between periods matter.