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, significantly 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 persisted gains in home prices with some slowdown, suggesting that the progress of home price increase should draw back into a more typical range in the next couple of months.
Case-Shiller reported year over year 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 off, while FHFA and Case-Shiller report the results of a weighted repeat-sales index. Because home sales among higher priced properties have been increasing more than among lower price tiers, the NAR median price had increased by more than the weighted repeat sales index- that computes price change built on repeat sales of the same residential property.
Case-Shiller’s stated price growth currently goes beyond NAR’s, likely due to the data lag. Case Shiller uses public records data which has a reporting lag. To manage the lag, Case Shiller data is based on a 3 month moving average, so reported January prices provide information from repeat transactions closed in November, December, and January. Because of this, the changes in the NAR median price often lead Case Shiller. In the graph in this article, it is quite clear that NAR first presented rising prices. As NAR shows slowdown in prices, expect Case Shiller data to do the same.
FHFA sources data mainly from Fannie and Freddie mortgages, transactions using prime conventional financing, and skips on cash transactions and also jumbo, subprime, and government-backed transactions like those using VA or FHA financing.
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