Home Prices Indices Show Mixed Results

Home Prices Indices Show Mixed Results

Michael Jensen, Mortgage and Finance Guru
, Mortgage and Finance Guru

There are two primary measures of housing prices that we track at FREEandCLEAR: the Federal Housing Finance Agency (FHFA) House Price Index, which uses certain nationwide mortgage activity to track home prices and the S&P / Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan markets.  Both indices are reported on a monthly basis and include information for the month that is two months prior to the reporting date.

The FHFA House Price Index for October 2014 showed that August housing prices increased 0.5% as compared to July and 4.8% on a year-over-year basis (so as compared to August 2013).  FHFA House Price Index figures for August came in slightly above analyst expectations and increased relative to the July figures on both a month-over-month and year-over-year basis.  The S&P / Case-Shiller Home Price Index for October 2014 showed that housing prices declined 0.1% in August as compared to July but increased 5.6% on a year-over-year basis, although this increase was less than the 6.7% year-over-year increase reported for July 2014.  The S&P / Case-Shiller Home Price Index came in below expectations and declined relative to the July figures. Although the indices showed slightly different results, both figures show that nationwide housing prices continue to stabilize.  It is important to highlight that these indices reflect the trend in nationwide housing prices and housing prices for a specific region or city can vary significantly.  After months of significant home price appreciation in 2012 and 2013, the trends reflected by the indices suggest that housing price appreciation is leveling off. (Source: Bloomberg)

What it Means for Mortgage Borrowers

A consistent leveling of home prices should draw more home buyers into the market.  Significant home price appreciation has been one of the biggest factors keeping buyers on the sidelines so cooling housing prices could be a significant positive for the mortgage and real estate markets. Stabilizing housing prices combined with lower interest rates create favorable conditions for prospective home buyers.  If you are thinking about buying a home, use the FREEandCLEAR Mortgage Qualification Calculator to determine what size mortgage you can afford and review the COMPARE LENDERS function on FREEandCLEAR to compare interest rates for lenders in your city.

The FREEandCLEAR Mortgage Expert


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NMLS: 357085
LICENSE: CA 00532825

Terms & Conditions
Ask about no closing cost options
Loan terms assume conforming mortgage amount, 80% LTV ratio and minimum borrower credit score of 740. Purchases and rate and term refinances only. $150,000 minimum mortgage amount. Borrower is responsible for $1,055 lender fee. Loan terms are subject to change without notice.
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About the author
Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

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