Home Price MonitorSeptember 2011

National Association of REALTORS®Research DivisionCutting Through the Noise: Various Home Price Measure

Highlights

• Most measures of existing home prices increased again in July. New home prices weakened a bit in the month and continued to weaken in August. NAR’s measure of median prices showed weakness in July and August as well, but this may be due in part to the end of the stronger home buying season and a shift in the mix of homes selling.

• Over the year, home prices are down a bit, but the decline is generally small, especially in the distressed-excluded data. Housing market activity is seasonal, so year over year comparisons are typically the most informative.

• Previously, new homes had shown better price performance over the year; August showed a sharp reversal of this trend. Low levels of new construction and very little activity in the new home sector may be causing substantial volatility in the data.

Outlook• Distressed sales, which hold back existing home prices,

continue to comprise about 30 percent of sales—down from nearly 40 percent earlier in the year. This should reduce drag on home prices.

• Stable-to declining inventories will also help support prices. • Further, rising apartment rents and stable affordability

conditions make a home purchase a good alternative to rental housing.

• Renewed job growth, confidence, and available financing are necessary for consumers to take advantage of buying opportunities.

• Some indicators, such as average FICO scores of those obtaining mortgages, show signs of improvement, though modest. But contrary forces in the form of lower loan limits do not bode well for credit availability.

Home Prices

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Home Price Data – Year over Year Change

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Home Price Changes

*All data are not seasonally adjusted. Monthly changes should typically be computed only for Seasonally Adjusted (SA) data. Because these change rates are often covered in the media regardless of their suitability for analysis, they are presented here but should be used with caution. Annual (yr-over-yr) changes computed for Not Seasonally Adjusted (NSA) data give a measure that is not affected by seasonal fluctuations.

Data Series

Jul-11 Monthly Change*

Jul-11 Annual Change*

Aug-11 Monthly Change*

Aug-11 Annual Change*

Next Release Date

NAR Median Sales Price: Total Existing Homes -2.5% -6.0% -1.7% -5.1% 20-OctNAR Median Sales Price: Existing 1-Family Homes -2.5% -6.2% -1.9% -5.4% 20-OctFHFA House Price Index: Purchase Only 0.8% -3.2% -- -- 25-OctS&P/Case-Shiller HPI: Composite 20 0.9% -4.1% -- -- 25-OctS&P/Case-Shiller HPI: Composite 10 0.9% -3.7% -- -- 25-OctCoreLogic National HPI 0.8% -5.2% -- -- Mid-OctCoreLogic National HPI - Distressed Excluded 1.7% -0.6% -- -- Mid-OctNew 1-Family Houses: Median Sales Price -4.0% 7.9% -8.7% -7.7% 26-Oct

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Spread of Existing Home Price ChangesYear over Year

Sources: NAR, Case-Shiller, CoreLogic, FHFA, HAVER

Supply and Demand Factors – Inventory

Sources: NAR

Supply – New Housing Starts and Permits

Sources: Census

Underlying Demand – Job Growth and Hires

Sources: BLS

Potential Job Growth – Openings

Sources: BLS

Housing Affordability

Sources: NAR

About the Price Data Series

Data Series Strengths/Weaknesses of Data SeriesNAR Median Sales Price: Total Existing HomesNAR Median Sales Price: Existing 1-Family Homes

FHFA House Price Index: Purchase OnlyWeighted Repeat Sales (WRS) Index, sourced from Fannie/Freddie purchase & refinance mortgages (excludes FHA, VA, Jumbo, Subprime)

S&P/Case-Shiller HPI: Composite 20

S&P/Case-Shiller HPI: Composite 10 CoreLogic National HPI CoreLogic National HPI - Distressed Excluded New 1-Family Houses: Median Sales Price Based on home builder interviews in the Survey of Construction

Most timely Data, broad geographic coverage, sourced from MLS and Realtor® board data, data in dollars, total exisiting includes condos and coops

WRS Index, sourced from County recorder data, weighted by property value; quarterly national index (not shown), monthly 10 and 20-city metro indexes and composites are 3 month moving averagesWeighted Repeat Sales Index, sourced from database of loan servicing and County recorder data

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER