The housing market has been a hot topic of conversation over the past two years, and the FRED Blog has discussed its cycles of sales and new construction, how fast houses sell, and state-level differences in prices and inventories. Today, we revisit the topic by exploring an evocatively named dataset: the hotness index.
Our first FRED map shows the July 2022 values of the market hotness index reported by Realtor.com. This index aims to reflect “fast moving supply and rising demand” conditions and does not necessarily represent high or rising housing prices. (See the source’s site for a description of the index.)
The data, available for selected counties, are color-coded in the map using a scale of cool blue-greens: darker equals hotter. At the time of this writing, two of the three hottest counties are less than an hour’s drive from each other in central Ohio. (Hovering over the map lets you see county names and hotness index scores.)
However, the housing market conditions measured with this index seem to be as fickle as Fall weather. The second FRED map shows the percent change in the index value between July 2021 and July 2022. The county experiencing the largest annual change in market hotness is in the northwest corner of New Mexico. The quadruple-digit change recorded there highlights another trait of the data: Even after excluding this New Mexico measure, which could arguably be labeled as an outlier, the average (mean) percent increase in market hotness was much higher than the typical (median) percent increase. That certainly signals a warming housing market.
Finally, all these county-level changes in housing market conditions are taking place while, at the national level, the number of home sales steadily declined between January 2022 and the time of this writing. You can count on the FRED Blog to continue taking the temperature of this topic for months to come.
How these maps were created: Search FRED for “Market Hotness: Hotness Score in Knox County, OH.” Select the series and click “View Map.” To change the data units to annual growth rates, use “Edit Map” and select “Units: Percent change from year ago.”