Some of our daily housing videos show a home-price panel: one price figure for each of five states and the United States, set out on a single chart. Every figure on that panel is an average. This page explains what the average counts, how an average is made, why it is not the price in the middle of the list, and how to read the panel itself.
What the average price counts
The panel uses the Federal Housing Finance Agency's National Mortgage Database. Each figure is the average purchase price or appraised value of homes bought with a new first-lien mortgage during the year. A first-lien mortgage is the mortgage with the first claim on the home, usually the main mortgage used to buy it.
Two limits follow from that definition. The figure covers home purchases only, so refinances are not in it. And it covers homes bought with a mortgage, so homes bought with cash are not included. The average describes the homes that were financed, not every home that changed hands.
FHFA builds these averages from a nationally representative sample of mortgages, not from every mortgage, so each figure is an estimate, not a full count.
How an average is made
An average takes every price in the group, adds them up, and divides the total by the number of homes.
An average, not the middle price
The average is not the price in the middle of the list. The middle price is a different measure, called the median: half of the homes sold for more and half for less. Our home-price panel does not show a median, and we never call its averages medians.
The difference matters when a few prices sit far from the rest. If the homes in a group sell for similar prices and a handful sell for far more, those very expensive homes pull the average up, while the middle price barely moves. So an average can sit well above the middle price, and two places with the same average can have quite different middle prices.
Neither measure is wrong. They answer different questions, so check which one a chart uses before comparing it with a price you saw somewhere else.
How to read the home-price panel
Each part of the panel has a purpose:
- · The title names the measure, so you know the figures are averages and what they count.
- · Each state row shows that state's average for the same year.
- · The bottom row shows the national figure the publisher reports for the same year.
- · The source line names the publisher, the period and the date the data was released.
The rows always run in the same fixed order, so a row's position says nothing about its value. The panel is a list, not a ranking, and it does not forecast prices or say where or when to buy.
Where to go next
The Sources list below links the publisher's page for this data. How to read our five-state panel explains the fixed order of the rows, how to read our housing charts covers the source line itself, and our property search is open whenever you want to look at homes.