First lets make sure that we say the data driving the title of this blog entry is coming from the Federal Home Finance Agency's Home Price Index. With that being said many in the know will realize that the information is old and outdated and not the most accurate.
According to the latest data it shows home prices have increased in the month of July by .8%. This makes it four months in a row that the report has shown an increase in home prices when most places that we experience and visit likely don't reflect an increase in home values.
The graph to the right is reflecting that a floor has been identified and that the housing recovery is in progress. The problem with the data is that it's extremely flawed and doesn't account for 1/3 of the homes sold due to mortgage guidelines being so strict and so many properties being purchased with cash which are very likely at very significant discounts. The data is flawed due to the following reasons below:
- Only homes backed by Fannie Mae or Freddie Mac are included in the index. In today's market, because of the FHA's popularity, that leaves 1 of 3 homes “uncounted”.
- Only existing home sales are counted, new home sales are not counted.
- The data comes with a 60-day delay. The October market is different from July's.
Ultimately we all can recognize that home values have dropped about 17% from their previous highs. The best way to make all of the information relevant to your specific situation is to simply contact a realtor and loan officer in your area and find out what values are doing and what opportunities may be available to you. If you have questions and would like a free obligation simply call (866) 825-6261.