Economists' Outlook

Housing stats and analysis from NAR's research experts.

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

  • Last week NAR released existing home sales and median home price information that showed gains of 9.1 percent in prices in February 2014 compared to February 2013, notably slower than trends in early summer/fall 2013 when price growth topped a double-digit pace.
  • 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 13.5 and 13.2 percent for the 10- and 20-city indexes in the year ending January 2014, while FHFA reported home price gains of 7.4 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.
  • Case-Shiller’s reported price growth currently exceeds NAR’s, likely as 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 January prices include information from repeat transactions closed in November, December, and January. For this reason, the changes in the NAR median price tend to lead Case Shiller. In the graph below, it is quite clear that NAR first showed rising prices. As NAR shows deceleration in prices, expect Case Shiller data to follow suit.
  • 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.