In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s second update discusses the FHFA Home Price Index.
- FHFA data show that U.S. house prices rose 7.1 percent for the 12 months ending in February 2013, according to their repeat-sales house price index.
- NAR reports the median price of all existing homes that have sold in the given time period while FHFA’s weighted repeat-sales index only compares price changes among homes for which there is a previous sale, examining the difference in price for property-pairs only. Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price has risen by more than the weighted repeat sales index, showing an 11.3 percent gain for the same 12-month period.
- While the NAR median price does not measure change in price for the same properties, it can be computed much more quickly than a weighted repeat sales index, thus information is available sooner, and as can be seen in the chart below, the trends in the data tend to be similar, so the NAR price index is a valuable early indicator of other housing price data.
- Additionally, similar trends are seen by region. NAR and FHFA data both show strongest price growth in the West and weakest price growth in the Northeast.
- NAR’s median home price for the 12th months ending March 2013 showed a gain of 11.8 percent, suggesting that further increases will be seen in the FHFA HPI next month.