Amherst Home Price Appreciation Index
- August month-over-month seasonally adjusted Amherst HPI saw a decline for the second sequential month and HPI is down 1.4% from its peak. This has been driven by quickly increasing mortgage interest rates.
- We anticipate the Fed will continue raising interest rates but pandemic-era trends are important. Even if prices fall 15% today, they will still be at their May 2021 level and annualize to 5% growth since January 2020. This would still be significantly higher than the average 3.1 percent between 2010 and 2020.
- August single-family rent growth remains strong. Rent growth was 11.3% year-over-year in August and continues to experience positive month-over-month growth. Inventories are still lower than pre-pandemic and absorption is still higher.
Amherst Rent Growth Index
The Amherst Home Price Appreciation Index (HPA) tracks home price changes in the same 20 Metropolitan Statistical Areas (MSAs) that are used to construct the S&P CoreLogic Case-Shiller 20-City Index. Amherst also tracks market-level home-price changes to produce home price indexes for over 200 Core-Based Statistical Areas (CBSA) in the United States. The index is published on a monthly basis and is based on the Case Shiller repeat-sales methodology. Unlike the indices published by S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency (FHFA), the Amherst HPA is a distressed-free index which does not include price changes due to foreclosures, short-sales, bank repossession, and REO resale. The use of Multiple Listing Services (MLS) data that are supplemented by CoreLogic off-market data allow the HPA to have a timelier look at monthly shifts in the housing market than some other leading market indices.2
The Amherst Rent Growth Index follows single-family detached homes rent price changes for the same MSAs that are used to construct the S&P CoreLogic Case-Shiller 20-City Index. Amherst also follows market-level statistics for over 150 CBSAs in the United States. The index is published every month and uses a repeat-rent methodology similar to the one employed for the Amherst HPA. The index incorporates both MLS and Altos rental data to produce a timely rent index.
Due to the early nature of our estimates, our indexes for prior months can change.
2At the time of writing this August 2022 housing market report, the S&P Case Shiller Index has been released up through July 2022.
The comments provided herein are a general market overview and do not constitute investment advice, are not predictive of any future market performance, are not provided as a sales or advertising communication, and do not represent an offer to sell or a solicitation of an offer to buy any security.
Similarly, this information is not intended to provide specific advice, recommendations or projected returns of any particular product of The Amherst Group LLC (“Amherst”) or its subsidiaries and affiliates.
These views are current as of the date of this communication and are subject to rapid change as economic and market conditions dictate. Though these views may be informed by information from sources that we believe to be accurate and reliable, we can make no representation as to the accuracy of such sources nor the completeness of such information. Past performance is no indication of future performance. Investments in mortgage related assets are speculative and involve special risks, and there can be no assurance that investment objectives will be realized or that suitable investments may be identified. Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. An investor could lose all or a substantial portion of his or her investment. No investment process is free of risk and there is no guarantee that the investment process described herein will be profitable. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.
Author: Gene Burinskiy | Vice President, Research & Data Journalism | The Amherst Group
Contributor: Thu Vo | Staff Financial Data Scientist | The Amherst Group