Today, in the Calculated Risk Real Estate Newsletter: Case-Shiller, FHFA House Prices Indexes and Conforming Loan Limits will be released on Tuesday
Brief excerpt: Last week, the National Association of Realtors® (NAR) reported that median house prices were up 6.6% year-over-year (YoY) in October. This is down from the peak growth rate of 25.2% YoY in May 2021.
Last month, Case-Shiller reported that the National Index was up 13.0% YoY in August, down from a YoY peak of 20.8% in March 2022.
The median prices reported by the NAR are for the most recent month only, so the prices are very timely. However, the prices can be distorted by the mix of homes sold.
Case-Shiller is a repeat sales index (they compare the current price of home to the previous sales price), and it a three-month average. So, the most recent report (for August), was actually for homes closed in June, July and August.
Although median prices can be distorted by the mix and repeat sales indexes (like Case-Shiller and the FHFA) are more accurate measures of house prices, the median price index might provide earlier hints on the direction of prices.
The following graph shows YoY price changes for the NAR median house prices, Case-Shiller National price index, and the FHFA purchase-only index (Fannie and Freddie loans only).
Most of the time, the NAR median price leads the Case-Shiller index, and even though the Case-Shiller September index will show a solid YoY gain, I expect house price growth to decelerate further in coming months and turn negative YoY soon.You can subscribe at https://calculatedrisk.substack.com/.