The FHFA updated their Home Price Index figures for Minnesota last Friday. With all the confusion going on with which numbers are trustworthy or not, and the fact that I am not overly trusting of this data – I wasn’t sure if I should post it or not.
With the question of the NAR figures, it is probably more important to keep an eye on multiple sources, so I added the Case Shiller composite 20 index along side it.
Generally speaking, they track fairly close, unfortunately we are comparing Apples to Oranges here. Minnesota vs. the Composite 20 from 2 different sources, but it is just a benchmark… According to the FHFA home price index, Minnesota’s home prices are increasing. This is highly suspect in mind as it goes against the raw MLS data from the Twin Cities region, which should account for a very large portion of the Minnesota sales..
Before I disregard this source, I do believe even with its flaws – it has its purposes. This is not a great benchmark for tracking the market especially in real-time, primarily because it is a quarterly index. However, it is probably a great source to view historical trends and the “larger picture”.
Now let’s look at it for the “larger picture”:
Draw an imaginary trend line from 1975 to today. In theory that is where home prices will ultimately be. We are getting close..
- FHFA: Home prices mostly flat in third quarter, and down from year ago (housingwire.com)
- House Prices Continue to Grow, with Modest Gains in the Third Quarter (eyeonhousing.wordpress.com)