The MLS® Home Price Index (HPI) measures home price trends and home price inflation/deflation in residential markets within territories of participating real estate boards in Canada.
Developed using data from the Multiple Listing Service®, the MLS® Home Price Index (or MLS® HPI for short) allows you to see trends in home prices for a specific type of house in a given neighbourhood.
Combined with the knowledge, experience and skills of your REALTOR®, the MLS® HPI allows you to better understand these trends — and how they can affect the market value of your home.
More importantly, though, it helps you approach one of life’s most important decisions — buying or selling a home — with greater confidence.
The MLS® HPI is not designed to predict the value of an individual property. However, since it is based on MLS® listing content — a comprehensive and accurate source of real estate data in Canada — the MLS® HPI provides a more precise picture of home price trends in a given region, municipality or neighbourhood.
It can help you by:
The MLS® HPI can help you gauge changes in housing prices over time, including changes in:
This information will help you easily determine the market value of a home.
The MLS® HPI tracks changes in home prices by comparing price levels at a point in time with price levels in a base (reference) period. The base period value is always 100.
For example, if the base period for single-family homes is 2005, and the MLS® HPI value for single-family homes in December 2011 is 149.1, you know that the value of single-family homes is up 49.1%, compared with 2005 (149.1 − 100 = 49.1%).
Q: How is the MLS® HPI different from average and median home price calculations?
A: The MLS® HPI is based on the value homebuyers assign to various housing attributes, which tend to evolve gradually over time.
This means that price changes calculated using the MLS® HPI are less volatile than those derived using common measures like average and median, which can swing dramatically in response to changes with high-end or low-end sales volumes over time.
It is often difficult to determine if average or median price fluctuations really reflect changes in buyers’ willingness to pay for certain housing attributes, or just changes in the volume of very expensive or inexpensive home sales from one time period to the next. The MLS® HPI removes that uncertainty.
Q: Is the idea of a Home Price Index new to Canada?
A: The real estate boards of Fraser Valley and Greater Vancouver have had an HPI in place since the mid-1990s. It provides information on home prices for British Columbia’s Lower Mainland, and has been widely recognized as the most accurate indication of housing price trends in those markets.
However, the MLS® HPI is new, in that it is the first Home Price Index to use MLS® data to track trends in home prices in markets across Canada.
Q: How often is the MLS® HPI published?
A: The MLS® HPI is published in each of Canada’s major real estate markets (Vancouver Island, Victoria, Greater Vancouver, the Fraser Valley, Calgary, Saskatoon, Regina, Greater Toronto, Ottawa and Greater Montreal), at or near the beginning of each month, to reflect activity that occurred during the previous month.