FHFA, Case-Shiller Home Price Measures

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 update discusses the FHFA and Case-Shiller home price measures.

  • Last week NAR released existing home sales and median home price information that showed gains of 10.4 percent in prices in January 2014 compared to January 2013, a slight acceleration from the 9.7 percent year-over-year gains in December but notably slower than trends in early summer/fall 2013.
  • Today, both the FHFA and S&P/Case-Shiller released their housing price index data. Both data series showed continued gains in home prices with some deceleration suggesting that the pace of home price increase should fall back into a more normal range in the next few months.
  • Case-Shiller reported gains of 13.6 and 13.4 percent for the 10- and 20-city indexes in the year ending December 2013 and a gain of 11.3 percent for their national price index, while FHFA reported home price gains of 7.7 percent.
  • NAR reports the median price of all homes that have sold while FHFA and Case-Shiller report the results of a weighted repeat-sales index. Because home sales among higher priced properties have been growing more than among lower price tiers, the NAR median price had risen by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.
  • The reason Case-Shiller’s reported price growth exceeds NAR’s is likely a result of the data lag. Case Shiller uses public records data which has a reporting lag. To deal with the lag, Case-Shiller data is based on a 3-month moving average, so reported December prices include information from repeat transactions closed in October, November, and December. For this reason, the changes in the NAR median price tend to lead Case-Shiller.
  • FHFA sources data primarily from Fannie and Freddie mortgages, transactions using prime conventional financing, and misses out on cash transactions as well as jumbo, subprime, and government backed transactions such as those using VA or FHA financing.

Danielle Hale, Director of Housing Statistics

As a Research Economist at NAR, Danielle studies tax issues, the wealth impact of home ownership, and different measures of home prices.

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