FHFA, Case-Shiller Home Prices

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 FHFA and Case-Shiller home prices.

• Home prices rose 0.6 percent from November to December and 5.8 percent for the 12 months ending in December 2012, according to the Federal Housing Finance Agency (FHFA), marking the 11th straight month of year-over-year gains. In the same period, prices reported by NAR rose 11.1 percent, which was the 10th consecutive month of year-over-year gains. More recent NAR data show continuing double-digit house price increases.
• NAR reports the median price of all homes that have sold while FHFA reports 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 has risen by more than the weighted repeat-sales index, which computes price change based on repeat sales of the same property.
• Quarterly data released by the FHFA showed a similar trend to the monthly data, rising 1.4 percent from the 3rd quarter to the 4th quarter of 2012 and 5.5 percent from the 4th quarter of 2011 to the 4th quarter of 2012 on a national level. Quarterly FHFA data also show state-level trends, and in the fourth quarter 38 states plus the District of Columbia saw rising house prices.
• FHFA also conducted a review of their all-transaction vs. purchase-only index and uncovered some evidence that re-finance appraisals have not fully kept pace with the rapid growth in home sales prices in the last year. This fact, coupled with a decrease in distressed properties which seems to have a positive effect on measured price growth, explain the current gap in price trends between the all-transaction and purchase-only indexes.
• Case-Shiller house price data was also released today and showed that through December 2012 national and 10- and 20-city indexes rose 7.3 percent, 5.9 percent, and 6.8 percent, respectively.
• When Case-Shiller reports December 2012 data, it uses a 3-month average of data because delays can occur in data recording. Thus the December figures include repeat sales that occurred in October, November, and December 2012.
• NAR’s next Existing Home Sales release, scheduled for March 21, 2013, will report February sales and home prices.