April home prices have improved over March in the new national composite index launched yesterday by FNC at the National Association of Real Estate Editors Annual Meeting in San Antonio.
FNC’s Residential Price Index, which is based on public record data along with data collected from millions of appraisal reports shared with FNC by its lender clients, reported that national average prices are 6.4 percent below a year ago, compared to 6.7 percent year over year in March. Its 30 city composite also found an uptick in April, with prices improving from 7.3 percent in March to 6.8 percent in April below 2010, which was the height of the tax credit boom,
April marked the first month this year where prices in the new index improved month-to-month. The FNC index is hedonic, which means its data is based on the physical characteristics of all properties in a given market over a specified time period. A hedonic price index is significantly more accurate than many of the other indexes on the market, such as Case Shiller’s repeat-sales index.
“Due to the fact it is based upon so many properties, you can slice and dice it in a way that you cannot do with a repeat sales index,” said Dorsey, FNC co-founder and inventor of the compliance and workflow technology used by the majority of the nation’s largest lenders.
In his speech, Dorsey covered the current state of home prices as reflected in FNC’s index.
“Most lenders share their valuation data with FNC for the purpose of building a comprehensive source of residential property data,” Dorsey said. “The appraisal data provides a real-time source of sales and property characteristic information that is not otherwise available.”
Houses change and so do their neighborhoods, but the RPI takes all of those factors into consideration. It can determine the effect of school districts on house prices and even reveal how natural disasters impact the price of homes and for how long.
FNC’s database allows it to drill down to measure significant variations on a local level by house size, price range, and other variables.
FNC provides real estate information technology to appraisers and lenders. Its platforms are in production at seven of the 10 largest U.S. mortgage lenders and provide value to large and small lenders with reduced costs and more efficient loan processing.