Economists' Outlook

Housing stats and analysis from NAR's research experts.

FHFA and S&P/Case-Shiller Home Price Measures

  • Last week NAR released median home price information that showed gains of 4.9 percent in July 2014 home prices compared to July 2013. This gain was slightly higher than the 3.7 percent seen in June and notably slower than double-digit price growth in summer/fall 2013.
  • Today, both the FHFA and S&P/Case-Shiller released their housing price index data for June. Both data series showed continued but decelerating gains in home prices, suggesting that the pace of home price increase should fall back into a more normal range in the next few months as NAR data has indicated.
  • S&P/Case-Shiller showed that home prices grew 8.1 percent year-over-year in June for the 10- and 20-city indexes while FHFA showed a gain of 5.2 percent. A new monthly Case-Shiller national index showed a gain of 6.2 percent year-over-year.
  • 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 is now higher 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 June prices include information from repeat transactions closed in April, May, and June. 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 continue to moderate in the next few months. For those seeking to determine what this means for home prices in their market, contact a local expert who can give you the most current local MLS information and put these national headlines in context.