Home price recovery index: Which metros have improved the most, least?

By September 2021, homes in all 100 of the top metro markets fully recovered any value they lost during the last housing bust, and overall, home values have only continued to climb since then. However, as they move at various speeds, that doesn't mean there still isn't a race to the top... and up from the bottom, too.

It also doesn't mean that home values can't or won't decline in some areas, at least on a quarter-to-quarter basis, if not over a longer time period.

The geographic mix of markets with the greatest value increases since previous price peaks continues to change, as does the group of areas where home value recoveries have taken longer and been more meager. While home values in all markets are above the peaks of the last boom, at least some areas are less so of late, as home values in some metropolitan have retreated a bit from pandemic-fueled record highs.

HSH.com’s Home Price Recovery Index uses a Federal Housing Finance Agency's (FHFA) Home Price Index as a basis to determine which of the top 100 housing markets have fully recovered value lost (or more) in the last housing bust where values in each market stand in relation to their mid-aughts peak. The time period covered by the HPI begins with the first quarter of 1991 and runs through the first quarter of 2024. We compare the metro's previous peak value from the mid-2000s housing boom against present values to determine if a given market has recovered all of its value lost in the 2011-2013 housing market bust, and how much above previous high-water marks a market is now.

Quarterly update
The first quarter of each year typically sees home values starting to rise from their fourth-quarter lowest point of the year as winter to gives way to rising early spring sales. While still a sluggish time in the market for home sales, the "seasonal effect" on home values from the holidays and slack-sale winter months begins to fade.

But that process seems to have been a little more muted and uneven in the first quarter of 2024. On a quarter-to-quarter basis, home values were lower in 22 of the top 100 metro housing markets, up from 13 sporting declines in the fourth quarter of 2023, but this number is far below the 49 markets with value declines during the first quarter of last year. At least compared to the fourth quarter of 2023, mortgage rates were considerably lower (6.75% on average versus 7.30%) so there was a modest burst of pent-up demand released into the housing market to start the year. Few homes available to buy mean solid buyer competition for those that do come onto market, and this demand in turn supports prices.

In general, home values remain very well supported even as home sales remain sluggish.

Just three markets posted a decline in value in the first quarter of 2024 compared to last year at this time. It is the fewest number of metros will annual value declines since the third quarter of 2022.

Most recovered group
Although home values overall remain well supported, outsized quarterly gains are becoming somewhat less common. Just six metros in the most recovered group managed a value increase in excess of one percent, although two of those were in excess of four percent for the period.

While a number of metro areas only swapped positions in our "most recovered" group, there was an actual new entrant: the Charleston-North Charleston, SC metro area, which posted a gain in home values of 4.75% in the fourth quarter. This move put it in the #9 slot, kicking out the Greenville-Anderson, SC metro area.

We also have a new leader of the group, as the Austin-Round Rock-Georgetown, TX area eked out a 0.97% increase in value, enough to bump the Denver-Aurora-Lakewood, CO from the top spot, as it managed just a 0.07% increase for the period. The Charlotte-Concord-Gastonia, NC-SC metro edged higher into the sixth position, pushing the Knoxville, TN metro down to #7, while the Buffalo-Cheektowaga, NY area's 4.40% increase in home values lifted it to eight, up one position from the fourth quarter.

It'll take some softening of values in the top group of metros and some strengthening in value by those metros just outside it to effect any change in the "most recovered" list. Although they have some gap to close, the two metros with the best shot to move up are the newly-exited Greenville-Anderson, SC and the Grand Rapids-Kentwood, MI areas. Both are within a few percentage points of making the list. Now that we're moving into the busiest homebuying time of the year, it's more about which markets see values rise the fastest rather than expecting to see higher-ranked areas post declines.

The metro areas with the least improvement in home values since the prior peak also continued to benefit from rising values. Of the least improved 10 metros, just three metros saw a quarterly dip in values, and five actually saw value increases of greater than one percent. The most notable increase was 4.04% in the Frederick-Gaithersburg-Rockville, MD metro area, but a gain of 3.21% in the first quarter of 2024 occurred in the Lake County-Kenosha County, IL-WI area, too.

While the Bakersfield CA metro area continues to be the metro with the smallest value gain since the last housing boom, home values here are still 26.01% above the peak levels attained way back in the second quarter of 2006, holding pretty steady despite a 0.62% softening in value to start 2024. It's hard to reckon that this market's prior "boom-era" high was now nearly 18 years ago, but it's also worth considering that this metro didn't even reach a "fully recovered" state until the second quarter of 2021.

Retiring the HPRI
As we've noted in the last few updates to the HPRI, we knew at some point there would be no more "recovery" in our Home Price Recovery Index. We expect to track the "most recovered" group for a while longer yet, and of course, HSH's Home Value Estimator (MyHPI) will continue to be updated, so you can track changes in your favorite metro as we go along.

More than a year ago, we introduced a new means of following changes in home values. Our Home Value Tracker uses a different set of FHFA data that includes both repeat purchases and refinances, so it's a very robust data set. However, as there is no "refinancing season" (and in fact, no refinancing at times at all!) the data is not seasonally adjusted and so can be more volatile from quarter to quarter.

That said, Home Value Tracker covers more than four times the metro areas as did our HPRI covering over 400 metros in all, and provides five value-change reference points -- change from last quarter, two quarters ago and one, three and five years ago. The new HVT contains two tables showing home values changes in the metros with the 10 largest and 10 smallest changes in home values over the last year, and a unique lookup tool so you can see your local market's changes over those time points, too.

We've also created a new custom-time-period tracking tool Home Value Tracker-MyHVT, where you can see what's happened to home values in any of the 400+ metros over any time frame you like, including what's happened while you owned your home (or any other period) -- from 1995 to now.

How has your home value changed in the time you've owned it?
The HPRI only reviews trough-to-peak changes for each market in our evaluation, so your local experience in value change from when you purchased your home to today will of course be different. To see what's happened with home prices during the time you've owned your home, check our home value estimator, MyHPI. To see where you are in your mortgage, use our mortgage amortization calculator.

Tracking and projecting your home equity
The combination of home price increases and your retirement of the amount you owe may see you with a larger equity stake than you think. If you're interested in how much equity you've got in your home or are looking to pursue a future home equity goal, you'll want to check out our Home Equity Calculator and Projector.

10 metro areas that have recovered the most

Can some locations or properties still not have achieved recovery?

Since the HPRI compares values that are derived from an entire metropolitan area (some of these quite expansive) it's certainly possible that some homes or neighborhoods have not participated in the home price recovery as strongly as other areas in the same metro. In fact, and although it continues to diminish, CoreLogic reported that in the fourth quarter of 2023, the total number of residential properties with negative equity was still 1 million homes, or 1.8% of all mortgaged properties. As noted above, home prices have generally remained well supported despite a sluggish sales market, although there are states where CoreLogic estimates that the negative equity share of properties runs as high as 5.7% (Louisiana) but as low as 0.7%, too (California).

Regardless, the problem of at least some homeowners being "underwater" still persists and may worsen if homebuying conditions don't improve.

However, even if home prices don't increase for such homes or areas, homeowners will eventually come to a positive equity position as they make regular payments on their mortgages, and even small improvements in home values over time will tend to help fill in any value gap. In this way, even if the value of a specific home hasn't yet returned to a previous high, it's not as though the homeowner won't ever have any equity.

For example, in the case of a home purchased at a previous price peak in early 2006 (and assuming no refinance of the mortgage) the homeowner would have paid off about 32 percent of the original loan amount by now. This calculation doesn't include any downpayment the homeowner may have made, so the equity stake would be increased by that amount, too. Purchases made before the peak period or after prices began to descend would see this equity stake be increased as well. Given interest rates in place in 2006 -- 30-year FRMs at about 6.5% in the third quarter, odds favor that a homeowner would have refinanced at least once (if not twice) by now to take advantage of falling rates, and a 3.5% refinance in September 2012 would still even see the homeowner with more than a 32% retirement of principal by now.

All now recovered, the remaining 90 metro areas

Here's a look at the remaining 90 metro areas from the FHFA's HPI list.

More about the HPI

The Home Price Index is a broad measure of the movement of single-family house prices. It has been published by the Federal Housing Finance Agency and precursor agencies since the fourth quarter of 1995.

For each market, the index uses 1991 home prices as a basis. Those dollars are "normalized" to a value of 100 for each market; that is, regardless of the actual dollar cost, the index value for a given market becomes 100. For example, a home price in Allentown, PA in 1991 might have been $65,000; this becomes a base value for Allentown of 100, and changes since then are presented as percentage changes from that initial 100 value.

The HPI is based on purchase-only transactions involving conforming, conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. Only mortgage transactions on single-family properties are included. The HPI does not include property transactions backed by FHA, VA, USDA or non-conforming (e.g. jumbo) mortgages.

The HPI is updated each quarter as additional mortgages are purchased or securitized by Fannie Mae and Freddie Mac.

The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales of the same properties.

The HPI shows the relative change in prices in a metropolitan area from quarter to quarter or period to period. HSH.com has pulled out information from each area to show the amount of change from 1991 to the pre-housing-crisis peak, the low achieved during or after the peak, and how much improvement has taken place since that near-term bottom.

The FHFA uses the revised Metropolitan Statistical Areas (MSAs) and Divisions as defined by the Office of Management and Budget (OMB) in Bulletin 20-01. If specified criteria are met and an MSA contains a single core population greater than 2.5 million, the MSA is divided into Metropolitan Divisions.

For more details on the HPI and how it is put together, see https://www.fhfa.gov/faqs/hpi