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Miami Home Price Index Hits Resistance

posted on September 18th, 2019 filed under: Uncategorized

Sometimes the markers of herd behavior are uncanny. Take, for example, the House Price Index maintained by the Federal Housing Finance Administration. At the peak of the housing bubble, the HPI for the Miami metro area hit 420.68 in the second quarter of 2007. This year, the index nearly kissed that level, reaching 419.82 in Q1 before falling back to 415.7 in Q2. The index had not registered a decline since 2013. It is remarkable that such a large-asset, opaque market could exhibit a pattern so closely resembling that of fully transparent equity markets, where share prices are known to retreat from overhead resistance. What’s next? Time will tell. But the idea that the market might be facing major resistance is troublesome, particularly considering that price-to-income valuations have returned to nosebleeed territory (a story for another day).

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