It's a question almost everyone is asking: "Should I refinance my mortgage?" If so, what's the best way to pay for my mortgage refinance

It's a question almost everyone is asking: "Should I refinance my mortgage?" If so, what's the best way to pay for my mortgage refinance

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

home price recovery

Even after years have passed since last decade's boom and bust, only about 80% of the nation's top 100 metropolitan areas have seen their homes recover all the value lost in the Great Recession and housing bust. Still-rising home values continue to help fill in home-value gaps, and lower-than-expected mortgage rates seem to have re-ignited price increases again. While that's not especially good news for potential homebuyers, it is welcome news for homeowners still waiting for the value of their home to get back to par. For 19 metro areas, the more than a decade-long wait for full recovery of home values still continues.

HSH.com’s Home Price Recovery Index uses the Federal Housing Finance Agency's (FHFA) Home Price Index as a basis to determine which of the top 100 housing markets have fully recovered (or more) and which still lag behind the housing recovery. The time period represented begins with the first quarter of 1991 and runs through the first quarter of 2020.

Quarterly update:
The steady creep to full value recovery for all 100 metro markets continued in the first quarter of 2020, and accelerating price gains almost everywhere could push another group into recovered territory very soon. That said, the COVID-19 outbreak and subsequent shutdown of the economy for months may have unpredictable effects on home values, but so far most indications are that very tight inventories of homes for sale in many places and near-record low mortgage rates are keeping potential buyer interest quite keen, even if it means hands-off home searches and mortgage closings.

That steady and even increasing demand continues to put upward pressure on the prices of homes being sold, at least for the moment. With nearly 40 million Americans filing for unemployment assistance since mid-March and another 4+ million already in mortgage-payment forbearance programs, it seems to us that there are a lot of people not in a position to buy homes this year and a sizable group that probably isn't likely to sell, either. That leaves the open question about values, which depends on whether demand by potential homebuyers fades this year and also whether more folks look to sell their homes. Either of these happenstances would tend to seen home price increases cool; in combination, they might cool back to comparably modest levels for a time.

Only one month of the second quarter is in the books by this point, but at least according to the National Association of Realtors, home prices did cool a little in April compared to March or February; both those earlier months reported year-over-year national price gains of 8.1%, but this settled to "only" 7.4% in April. A year ago at this time, annual price increases were running at a far more modest 3.5%, but mortgage rates were closer to 4% than today's 3.25%, and high prices and firmer financing costs cooled homebuyer demand somewhat. At least until the COVID-19 pandemic disrupted everything this year, strengthening income gains and rock-bottom mortgage rates had re-ignited home prices to annual rates more than double year-ago comparisons.

In the first quarter of 2020, just three metro areas posted a quarter-to-quarter decline in home values, and only modest declines at that. For the same period last year, modest quarterly declines were seen in 22 metros, so it's clear that the pace of increase has again quickened and broadened.

Although there were increases in values in the other 97 metro areas, only two metros saw large enough increases in home values to move them into the ranks of the recovered in he first quarter of 2020. With the gains, the Frederick-Gaithersburg-Rockville, MD and Tucson, AZ metro areas are now 0.48% and 0.46% above their former "boom-time" price peaks, respectively. For the Frederick-Gaithersburg-Rockville, MD area, the full recovery period for home values in the market was just one quarter shy of 14 years; Tucson, AZ took a total of 13 years. Presently, eighty-one metro markets are now at new price peaks.

Most recovered group
The group of 10 markets that have values the furthest above their former "boom-era" peaks saw just a single change among its ranks in the first quarter of 2020. Strong home value appreciation in San Antonio-New Braunfels, TX and in the Buffalo-Cheektowaga NY metros saw them move up to the #8 and #9 slots respectively, and a continued surge by the Boise, ID metro area was enough to move it in to the #10 slot, kicking Colorado Springs, CO out of the top ten. Otherwise, the San Francisco-San Mateo-Redwood City metro elbowed one slot higher, to #4, nudging above the Fort Worth-Arlington-Grapevine, TX metro. No other changes were seen, but there was a milestone of sorts, as the Denver-Aurora-Lakewood, CO metro has now seen it's previous price peak (1Q06) more than doubled.

The most common feature among "most recovered" markets is that most didn't "bust" after the last boom, or at least not to extreme degrees. Dallas-Plano-Irving, TX, for example, saw only a 4.02% drop in value from peak to valley. However, with its move into the top group, Boise is unique among the ten most recovered markets in that it has overcome the largest peak-to-trough value decline of the bunch so far. At its nadir, Boise's aggregate value was nearly 45% below its peak; it has now moved some 55.26% above its prior high-water mark. For a time, the San Francisco-San Mateo-Redwood City, CA (MSAD) claimed the "covered biggest gap" title, but the high/low differential for the Bay Area was only about half as large as Boise's.

10 markets with the largest value gaps
There was rather more movement in the group of markets with the largest value chasms yet to fill, but little more than a shuffling of the ranks. That's not to say that there wasn't improvement, even marked improvement, in the fortunes of the most-challenged metros; there was. For example, in the previous quarter (4Q19), the market with the deepest hole was 21.13% below its previous peak; move forward to the latest quarter and the Bakersfield, CA metro is now just 16.64% below its former top, where a year ago, that gap was still 25%. Similar if smaller moves this quarter were seen among the group, with most gaps shrinking by several percentage points. In fact, only five markets now have value gaps in the double digits, and the number continues to shrink.

In terms of cumulative value recovery, five metro areas have seen home prices rise more than 100% from their bottoms but still haven't made it back to previous-peak valuations. The markets with more than doubling of values but still falling short include the Cape Coral-Fort Myers, FL metro (a market that still has the second-largest gap to cover at 13.92%), Stockton CA, North Port-Sarasota-Bradenton FL, Riverside-San Bernardino-Ontario, CA and the Las Vegas-Henderson-Paradise, NV metro, where values have increased by an astounding 157.39% but yet remain 4.26% below 2006 peaks. At one point, Las Vegas was the market that endured with the biggest boom-and-bust as values dropped more than 60% from peak, but it has stormed back in the last eight years.

"Nearly recovered": Who's Next
Our "nearly recovered" group contains those areas with current values only about two percent below previous highs and who are likely to be next in line to hit "fully recovered" in the next quarter or so. A group of seven markets now meet that criteria, and there is a good chance that four or more will make the leap to recovery when the first quarter data comes out. The metros of Wilmington, DE-MD-NJ, Virginia Beach-Norfolk-Newport News, VA-NC, North Port-Sarasota-Bradenton, FL, and Newark, NJ-PA (MSAD) are all within a percentage point of full recovery, and the metros of Baltimore-Columbia-Towson (MD), Riverside-San Bernardino-Ontario (CA) and Allentown-Bethlehem-Easton (PA) are closer than two percent but will likely need more than a another quarter to get over the hump.

It will be very interesting to see how or if the near-shutdown of the economy for two months or more has affected home vales when the second quarter data comes out in August.

How has your home value changed in the time you've owned it? We only review trough-to-peak 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 price increase and your retirement of the amount you owe may see 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

Peak high
Low value
prev peak
Denver-Aurora-Lakewood, CO274.95252.74551.47100.57%
Austin-Round Rock-Georgetown, TX268.00258.31508.6389.79%
Dallas-Plano-Irving, TX (MSAD)171.62164.72304.9477.68%
San Francisco-San Mateo-Redwood City, CA (MSAD)275.34213.01479.7174.22%
Fort Worth-Arlington-Grapevine, TX (MSAD)168.26159.58290.7372.79%
Nashville-Davidson--Murfreesboro--Franklin, TN222.89195.96373.8067.71%
Houston-The Woodlands-Sugar Land, TX200.06193.90325.4962.70%
San Antonio-New Braunfels, TX215.17198.76339.0457.57%
Buffalo-Cheektowaga, NY145.65145.17228.9757.21%
Boise City, ID296.44163.28460.2655.26%

10 metro areas that have recovered the least

It is important to note that many markets -- even the 10 that still remain the furthest from their boom-year price peaks -- have seen significant price recoveries since hitting their bottom values. However, home prices in areas like Bakersfield, CA may have been inflated to such a degree that even when they return to a “normal” value they may still be well below their previous price peak.

For example, despite more than a 124 percent rise from the metro's lowest value (a figure reached in the fourth quarter of 2011), there is still a gap of over 12 percent yet to go in the Stockton (CA) metro. There are plenty of other markets with a similar tale to tell, and places where the home price recovery is happening at a much slower pace.

It's important to note that even in markets that have not yet returned to previous peaks, it's not as though borrowers have no equity in their homes. Underwater or no- or low-equity situations might only exist for a relatively small slice of properties purchased during peak pricing times of last decade's boom.

For example, if someone purchased a home in the Baltimore-Columbia-Towson, MD metro area before the first quarter of 2007, our calculations suggest that the value of your home has recently risen to or is now slightly above its original purchase price. This is also the case if the home was purchased when prices had begun to decline, in this instance after the first quarter of 2008. In this metro, only homes purchased in this four-quarter window have yet to reclaim their original purchase value.

In either case, years of making regular payments should also by now give the homeowner a considerable equity stake. In the case of a home purchased in early 2007 (and assuming no refinance of the mortgage) the homeowner would have paid off about 27 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. In the case of a pre-2Q05 purchase, the homeowner would likely have a minimum 32 percent equity stake.

Similar experiences should be seen in other markets, too. Also, as home prices generally continue to increase over time, this "yet unrecovered time period" will continue to narrow. For example, in Sacramento, this time period has shrunk by three quarters over the last year alone.

Peak high
Low value
peak value
Bakersfield, CA251.88117.65215.9416.64%
Cape Coral-Fort Myers, FL316.26131.57277.6213.92%
Bridgeport-Stamford-Norwalk, CT241.53182.11213.1313.33%
New Haven-Milford, CT201.67152.76179.0412.64%
Stockton, CA275.03109.12249.4910.24%
Camden, NJ (MSAD)223.56163.39203.389.92%
Elgin, IL (MSAD)200.42128.83184.028.91%
Lake County-Kenosha County, IL-WI (MSAD)208.58139.60193.507.79%
Hartford-East Hartford-Middletown, CT172.95144.56160.637.67%
Fresno, CA272.77136.25256.106.51%

How has the value of YOUR home changed?

HSH.com has developed a tool that allows you to see how the price change in your market has affected the value of your home. With our “Home Value Estimator,” you select your market and the time frame in which you have owned your home to estimate how the changes in your market have impacted your home’s value. If your market still hasn't fully recovered and you think your home is still underwater, find out when you'll have positive home equity again with our KnowEquity When calculator.

Neither most nor least: 80 more metro areas

Here's a look at the remaining 80 metro areas from the FHFA's HPI list.

Peak high
Low value
Amount still
below peak
now above
prev peak
Akron, OH177.27141.08208.62n/a17.68%
Albany-Schenectady-Troy, NY183.92168.27205.6n/a11.79%
Albuquerque, NM238.74188.9259.23n/a8.58%
Allentown-Bethlehem-Easton, PA-NJ204.55151.85200.861.84%n/a
Anaheim-Santa Ana-Irvine, CA (MSAD)286.99196.78335.67n/a16.96%
Atlanta-Sandy Springs-Alpharetta, GA199.85139.04280.7n/a40.46%
Baltimore-Columbia-Towson, MD269.29206.22265.841.30%n/a
Baton Rouge, LA229.62213.53279.52n/a21.73%
Birmingham-Hoover, AL213.54175.68270.93n/a26.88%
Boston, MA (MSAD)268.9221.07343.34n/a27.68%
Cambridge-Newton-Framingham, MA (MSAD)257.49212.58333.11n/a29.37%
Charleston-North Charleston, SC285.98203.05392.99n/a37.42%
Charlotte-Concord-Gastonia, NC-SC195.21159.74288.26n/a47.67%
Chicago-Naperville-Evanston, IL (MSAD)238.37160.25227.025.00%n/a
Cincinnati, OH-KY-IN179.57149.96230.11n/a28.15%
Cleveland-Elyria, OH173.63135.51197.68n/a13.85%
Colorado Springs, CO259.77214.35401.34n/a54.50%
Columbia, SC187.52161.17226.23n/a20.64%
Columbus, OH180.44158.54269.61n/a49.42%
Dayton-Kettering, OH155.86125.71190n/a21.90%
Detroit-Dearborn-Livonia, MI (MSAD)207.63112.33229.98n/a10.76%
El Paso, TX195.49169.73209.6n/a7.22%
Fort Lauderdale-Pompano Beach-Sunrise, FL (MSAD)352.73176.59367.84n/a4.28%
Frederick-Gaithersburg-Rockville, MD (MSAD)280.38280.38280.38n/a0.48%
Gary, IN (MSAD)186.75158.52230.93n/a23.66%
Grand Rapids-Kentwood, MI184.5137.53273.3n/a48.13%
Greensboro-High Point, NC167.97144.06211.82n/a26.11%
Greenville-Anderson, SC193.59173.85288.35n/a48.95%
Indianapolis-Carmel-Anderson, IN160.18145.43241.84n/a50.98%
Jacksonville, FL301.28182.02338.56n/a12.37%
Kansas City, MO-KS201.01164.91281.57n/a40.08%
Knoxville, TN206.27179.51275.59n/a33.61%
Las Vegas-Henderson-Paradise, NV269.27100.24258.014.36%n/a
Little Rock-North Little Rock-Conway, AR191.17181.28225.25n/a17.83%
Los Angeles-Long Beach-Glendale, CA (MSAD)276.8166.12322.25n/a16.42%
Louisville/Jefferson County, KY-IN200.55187.05277.51n/a38.37%
Memphis, TN-MS-AR175.98144.28224.91n/a27.80%
Miami-Miami Beach-Kendall, FL (MSAD)419.56214.82441.25n/a5.17%
Milwaukee-Waukesha, WI235.81189.41279.28n/a18.43%
Minneapolis-St. Paul-Bloomington, MN-WI264.26188.6315.55n/a19.41%
Montgomery County-Bucks County-Chester County, PA (MSAD)213.2183.67239.65n/a12.41%
Nassau County-Suffolk County, NY (MSAD)301.32236.64330.55n/a9.70%
New Orleans-Metairie, LA265.46223.3331.8n/a24.99%
New York-Jersey City-White Plains, NY-NJ (MSAD)273.92221.35301.42n/a10.04%
Newark, NJ-PA (MSAD)271.33206.95269.770.58%n/a
North Port-Sarasota-Bradenton, FL344.83162.92343.110.50%n/a
Oakland-Berkeley-Livermore, CA (MSAD)308.1162.76379.4n/a23.14%
Oklahoma City, OK201.55193.4273.95n/a35.92%
Omaha-Council Bluffs, NE-IA201.2181.03279.68n/a39.01%
Orlando-Kissimmee-Sanford, FL288.05142.55310.01n/a7.62%
Oxnard-Thousand Oaks-Ventura, CA284.66172.92299.52n/a5.22%
Philadelphia, PA (MSAD)239.05204.23307.8n/a28.76%
Phoenix-Mesa-Chandler, AZ340.98161.37391.57n/a14.84%
Pittsburgh, PA179.31174.83266.51n/a48.63%
Portland-Vancouver-Hillsboro, OR-WA337.08248.62485.24n/a43.95%
Providence-Warwick, RI-MA242.91177.93262.98n/a8.26%
Raleigh-Cary, NC199.96175.71285.95n/a43.00%
Richmond, VA239.97184.37285.04n/a18.78%
Riverside-San Bernardino-Ontario, CA272.16127.64267.81.63%n/a
Rochester, NY138.86134.42180.19n/a29.76%
Sacramento-Roseville-Folsom, CA257.53125.76267.44n/a3.85%
Salt Lake City, UT353.33262.17523.85n/a48.26%
San Diego-Chula Vista-Carlsbad, CA299.36187.97344.56n/a15.10%
San Jose-Sunnyvale-Santa Clara, CA289.78196.99442.54n/a52.72%
Seattle-Bellevue-Kent, WA (MSAD)297.2203.26445.52n/a49.91%
St. Louis, MO-IL211.72173.27253.24n/a19.61%
Syracuse, NY149.57140.7182.35n/a21.92%
Tacoma-Lakewood, WA (MSAD)294.85183.46407.02n/a38.04%
Tampa-St. Petersburg-Clearwater, FL313.23170.6365.38n/a16.65%
Tucson, AZ308.71308.71308.71n/a0.46%
Tulsa, OK190.78170.11253.47n/a32.86%
Urban Honolulu, HI194.8173.7278.41n/a42.92%
Virginia Beach-Norfolk-Newport News, VA-NC274.44206273.30.42%n/a
Warren-Troy-Farmington Hills, MI (MSAD)206.38123.49245.36n/a18.89%
Washington-Arlington-Alexandria, DC-VA-MD-WV (MSAD)283.48204.18327.09n/a15.38%
West Palm Beach-Boca Raton-Boynton Beach, FL (MSAD)322.85154.39350.02n/a8.42%
Wichita, KS183.84165.57228.89n/a24.51%
Wilmington, DE-MD-NJ (MSAD)216.44165.14215.840.28%n/a
Winston-Salem, NC172.17152.99212.9n/a23.66%
Worcester, MA-CT232.05171.48252.09n/a8.64%

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 1990 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 1990 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 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 (i.e. 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 or refinances on 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 1990 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 18-04. 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 http://www.fhfa.gov/Media/PublicAffairs/Pages/Housing-Price-Index-Frequently-Asked-Questions.aspx

Leave a Comment

Mahesh January 28, 2019 9:58 am    

one of the most important information who planning to invest in a home.Thanks, Keith Gumbinger.

Add to Homescreen?
Install this web app on your phone :tap and then Add to homescreen