Understanding the Freddie Mac House Price Index (FMHPI®)
The Freddie Mac House Price Index (FMHPI®) provides a precise, month-by-month view of U.S. home price trends by tracking repeat sales of the same properties over time, making it a more reliable indicator than simple average or median sale price metrics. Updated through July 2025 and released on August 29, this index remains a trusted resource for understanding market shifts in metros like Austin, where home values continue to face one of the steepest post-peak corrections in the country. Whether you’re buying, selling, or analyzing market cycles, the FMHPI® delivers critical insights into long-term pricing patterns, short-term fluctuations, and post-pandemic performance.
Understanding the Freddie Mac House Price Index (FMHPI®) and Its Impact on the Austin Housing Market – July 2025 Update
The Freddie Mac House Price Index (FMHPI®) remains one of the most reliable and widely used benchmarks for tracking residential real estate price trends across the United States. Updated monthly, the index reflects changes in single-family home values based on conventional, conforming mortgage transactions purchased or securitized by Freddie Mac. Because it is built on verified mortgage data rather than listing activity or atypical financing, FMHPI provides a clear, consistent, and unbiased view of price performance that helps analysts, policymakers, and real estate professionals assess long-term market stability and affordability.
Unlike MLS datasets, which can be influenced by off-market activity, seller concessions, or inconsistent reporting, FMHPI delivers a uniform baseline for evaluating home prices at national, state, and metro levels. It captures cumulative appreciation from baseline dates such as January 2020 or January 2021, as well as month-to-month and year-over-year changes. This layered perspective allows us to see both near-term adjustments and the bigger historical picture.
Austin’s Position in July 2025
The latest FMHPI release, posted on August 29, 2025, covers data through July 2025. Austin continues to lead all major U.S. metros in post-peak declines, with prices now 15.8% below the peak reached in May 2022. Among 384 U.S. cities tracked, Austin ranks at the very bottom in peak-to-current performance, underscoring how sharply the local market has corrected since the pandemic boom. By comparison, the national average drop from peak pricing is just -1.5%.
On a year-over-year basis, Austin prices remain in negative territory at -6.0%, compared to the national average of +5.7%. Month-to-month, July 2025 brought another small decline at -2.8%, in sharp contrast to the national monthly gain of +1.16%. These figures confirm that Austin is not only lagging the national recovery but is still actively trending downward while other metros are moving higher.
Longer-Term Perspective
Despite this correction, Austin’s housing values are still significantly higher than pre-pandemic baselines. From January 2020, prices remain up 39.9%. From January 2021, they are up 17.6%. These gains highlight how extraordinary the pandemic surge was: during 2020–2022, Austin home prices jumped more than 70% before peaking, driven by remote worker inflows, tech-sector expansion, and migration from higher-cost metros. Once mortgage rates rose and inventory constraints eased, a correction was almost inevitable.
The challenge is that other metros have not just stabilized but in many cases surpassed their previous highs. Cities like Milwaukee (+7.1% YoY), New York (+5.4% YoY), Chicago (+5.9% YoY), and Cleveland (+4.9% YoY) are all setting new peaks in 2025. Austin, by contrast, remains one of only a handful of large metros where values continue to decline on both an annual and monthly basis.
Implications for Buyers and Sellers
For buyers, the FMHPI data confirms that Austin offers one of the broadest “discount windows” in the country relative to peak pricing. With values nearly 16% off highs, affordability has improved compared to 2022, even though mortgage rates remain a headwind. Negotiability is still stronger here than in metros where competition has reignited.
For sellers, the message is clear: pricing strategies cannot be anchored to May 2022 values. The gap between national averages and Austin’s performance underscores the risk of holding out for a rebound that may not come quickly. Sellers need to align with the current market environment, where elevated inventory and affordability challenges continue to put downward pressure on prices.
Looking Ahead
FMHPI is not a predictive forecast, but it is a critical benchmark for understanding where the market stands. When paired with local MLS data on active inventory, absorption rates, and pending contracts, it helps give a complete picture of market health. Austin’s housing market in July 2025 remains one of the most corrected in the nation, with YoY and MoM declines that set it apart from other large metros. Still, the long-run appreciation since 2020 shows the underlying strength of the market when zoomed out.
In short, Austin is in the middle of a normalization phase. Short-term recovery remains elusive, but the long-term fundamentals of job growth, in-migration, and economic diversity still support stability once affordability improves. The key takeaway for now: Austin is at the bottom of the national leaderboard in price performance, but that very weakness creates opportunity for buyers willing to step into the market at discounted levels compared to recent history.
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