Economists' Outlook

Housing stats and analysis from NAR's research experts.

REALTOR® University Speaker Series: Dr. Nayantara Hensel

Dr. Nayantara Hensel, Associate Director of Policy and Research at the Federal Housing Finance Agency[1], gave an update on the status of the housing market in a presentation at the REALTOR® University Brown Bag Lunch Series recently.   A graduate of Harvard University and former Chief Economist of the U.S. Navy, Dr. Hensel discussed current trends in the housing market:

Of particular interest in her talk was the discussion of the major house price indexes.  Each index measures housing trends slightly differently, but the indexes tend to vary together.

  • The FHFA home price index is based on home prices within mortgage level data obtained from Fannie Mae and Freddie Mac.
  • The S &P/Case-Shiller index of home prices is based on county recorder data.
  • The CoreLogic Index uses county recorder data and home price data obtained from loan servicer data.

All indexes use the “repeat-transactions” modeling framework, based on the measurement of price changes for homes that have sold at least twice in the past.  The Case-Shiller  and CoreLogic Indexes are value weighted-- price trends for more expensive homes are given more weight in the index calibration.; the FHFA index is transaction weighted.

Dr. Hensel presented an overview of the 10 metropolitan areas with the highest rates of recent house price appreciation:   Modesto, Merced, Vallejo-Fairfield, Yuba City, Stockton-Lodi, Riverside-San Bernardino, and Santa Rosa California; Las Vegas and Reno Nevada; and Bend-Redmond, Oregon.

Conclusions of Interest to REALTORS®:  The press is filled with a variety of price index measures as related to housing.  However, all of the indexes tend to vary together.   Some of the areas of the country that appeared to have some of the worst housing markets during the Great Recession appear to have had good recovery.  Put differently, avoiding excess in the housing markets is good; recovery from previous excesses has in many cases already occurred.

[1]               The FHFA is a regulatory agency with jurisdiction over Fannie Mae, Freddie Mac, and the 12 Federal Home Loan Banks.

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