Economists' Outlook

Housing stats and analysis from NAR's research experts.

Case-Shiller and FHFA Housing Price Data: Continued but Decelerating Gains

  • Last week NAR released median home price information that showed gains of 5.5 percent in October 2014 home prices compared to October 2013.  This gain was slightly higher than the 5.3 percent seen in September and also higher than the 4.2 percent average price increase in the peak selling months of May to August.  Still, this rate of price growth is in the normal 4 to 6 percent range, a great improvement over the double-digit price growth that prevailed in 2013.
  • Today, both the FHFA and S&P/Case-Shiller released their housing price index data for September.  Both data series showed continued but decelerating gains in home prices following the previous trend of NAR data back into a normal range of growth.
  • S&P/Case-Shiller showed that home prices rose 4.8 percent year over year in September for the 10-city and national indexes while the 20-city index saw a gain of 4.9 percent from September 2013.  The FHFA showed that prices increased by 4.3 percent in the same period.
  • 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 sometimes increases by more than the weighted repeat sales index—which computes price change based on repeat sales of the same property.
  • Other sources of difference in the data that may explain why Case-Shiller data is measuring a lower rate of increase than NAR is the data lag.  Case Shiller uses public records data as the source of the index, and public records have a reporting lag.  To deal with the lag, Case Shiller data is based on a 3 month moving average, so reported September prices include information from repeat transactions closed in July, August, and September.  For this reason, changes in the NAR median price tend to lead Case Shiller changes.
  • 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.
  • Given recent trends in NAR data, we expect Case Shiller- and FHFA-measured price growth to stabilize at this more moderate rate of year over year price gains.  To determine what this means for home prices in your market, contact a local expert who can give you the most current local MLS information and put these national headlines in context.

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