What is the MLS® HPI?
Average or median prices can change a lot from one month to the next and often paint an inaccurate or even unhelpful picture of price values and trends. The MLS® Home Price Index, or HPI, is for homes the way that the Consumer Price Index is for consumables. They both measure the rate of price changes.
The MLS® Home Price Index is based on the value that home buyers assign to various housing attributes. This includes things like living area, basements and garages plus features like proximity to schools, shopping and hospitals. The MLS® HPI compiles data on a neighbourhood’s typical home with the features most common in that area and then assigns a benchmark price. By estimating the price of a typical home’s property features rather than the property itself, it provides an “apples to apples” comparison of home prices and excludes the extremes of high- and low-end sales.
By tracking the changes in the MLS® HPI over time, it allows the consumer to see the bigger picture and understand how these trends can affect home prices for the local market. It also provides insight into specific housing categories in the overall market or a given neighbourhood.
REALTORS® use the MLS® HPI tool to provide a more accurate picture of price trends in residential markets by combining this detailed comprehensive pricing information with their knowledge, expertise, and skills to help consumers approach buying or selling a home with greater confidence.
How does the MLS® HPI work?
The MLS® HPI can help your REALTOR® gauge changes in housing prices over time, including changes in:
- Overall home prices for the market as a whole
- Prices for specific housing categories in a given area or for the overall market
- This information will help your REALTOR® easily determine the market value of a home.
Click here for the MLS® Home Price Index Benchmark Descriptions for Composite, Single Family, Townhouse, and Apartment in the Greater Edmonton Area (GEA).