FHFA Releases New Working Paper Analyzing the Effect of Distressed Sales on the FHFA House Price Index


WASHINGTON, D.C. – August 13, 2013 – (RealEstateRama) — The Federal Housing Finance Agency (FHFA) today released a Working Paper that evaluates the impact of distressed sales—sales of bank-owned properties and short sales—on the FHFA house price index (HPI).

The study details recent and historical price discounts associated with such sales and provides statistical evidence supporting the validity of the approach FHFA has used to form its “distress-free” house price indexes. Such indexes, which were first released in the summer of 2012, show price trends free of the direct effects of distressed sales.

The paper, “Working Paper 13-01: Distressed Sales and the FHFA House Price Index,” was authored by FHFA Principal Economist Andrew Leventis and FHFA Economist Will Doerner in FHFA’s department of Housing Finance Research and Analysis. FHFA Working Papers are preliminary products circulated to stimulate discussion and critical comment. The analysis and conclusions are those of the authors and do not imply concurrence by other staff at the Federal Housing Finance Agency or its Director.

Questions about current or future research on distressed sales and, more generally, house prices can be addressed to .

Link to Working Paper


The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.5 trillion in funding for the U.S. mortgage markets and financial institutions.

Corinne Russell
(202) 649-3032
Stefanie Johnson (202) 649-3030

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