FHFA home value volatility
How much a tract's annual house price changes have varied from year to year across the full published index series.
The year-to-year variability of house price changes in a tract, measured across the whole span of the index series we carry.
Two tracts can arrive at the same total appreciation by very different routes. One may have gained a few percent every year without interruption; the other may have surged, fallen back, and surged again. Appreciation measures where prices ended up. This measure describes how bumpy the path was, and it is reported separately because the two are close to independent of one another.
It is calculated as the standard deviation of the annual percent changes in the Federal Housing Finance Agency's tract-level house price index. Standard deviation is a measure of spread, so a larger figure means the annual changes were more widely scattered around their own average. The measure is symmetric: it treats a year of unusually rapid gains and a year of unusually sharp losses alike, since both are departures from the tract's typical behaviour. It carries no information about the direction prices moved, which is what the appreciation measures cover.
Metrics in this family#
Price volatility, full published series
stabilityThe standard deviation of the tract's annual percent price changes across the entire published series, currently 2010 through the most recent release. The value is shown only for tracts whose index is present for the whole of that span, so the figure always describes the full period rather than a fragment of it.
The span covered includes both the post-2010 recovery and the rapid appreciation and cooling of the 2020s, so a tract's figure reflects how it behaved through two very different markets.
Considerations#
Estimation noise raises this measure directly. In a tract with few transactions, year-to-year movement in the index reflects both the market and the uncertainty of estimating an index from thin data, and the two cannot be separated from what FHFA publishes — see the agency's notes on tract-level indices. This matters more here than for the appreciation measures, where noise tends to average out across a window.
Coverage is partial. An index exists only for tracts with enough repeat transactions, and this measure additionally requires an unbroken series, so it covers fewer tracts than the windowed appreciation measures do.
FHFA revises history with every release, so both the annual changes and their spread can shift between refreshes, most of all in the newest years.
The index is nominal. Because it is not adjusted for inflation, years of high general inflation contribute to measured variability alongside genuine movement in local housing markets.
References#
- 1Experimental Dataset for Supertract-Based Census Tract HPIs FAQhttps://fhfa.gov/sites/default/files/2023-03/wp2101-faqs.pdf