RGI Home Price Indexes
What it is
The CA/DRI indexes have been developed to support localized hedging and risk management with house price indexes at the metro, county, city, zip code or neighborhood level. The CA/DRI Zip Code indexes provide unique support for commercial use since they are based solely on sales transactions taking place in any given geography; that is, they are “stand-alone” indexes.
The CA/DRI indexes are created using a hedonic regression-based methodology, and have been created for single-family homes and condominiums. The hedonic methodology has the advantage of allowing the use of essentially all house sales transaction data. This is particularly important for creating local indexes where the availability of an adequate number of transactions each month or quarter is an issue as well as creating indexes for additional transaction types such as REO sales.
The CA/DRI indexes are based on a hedonic methodology which has the advantage of allowing the use of essentially all house sales transaction data. This is particularly important for creating local indexes where the availability of an adequate number of transactions each quarter is limited. The CA/DRI indexes are completely transparent which allows an analyst who can obtain data from a vendor to duplicate the CA/DRI indexes.
Market Applications
There are numerous applications for these house price indexes, including the support and facilitating of housing derivatives trading, and analyzing housing underlying mortgage-backed securities.