Whether you’re looking to buy a home, or you’re just interested in analyzing the real estate market, it’s important to understand what the home price index is. There are many different indexes to consider, and it’s important to find the one that’s right for you.
Case-Shiller U.S. National Home Price Index
CSI (S&P Case Shiller) is a series of home price indices, based on repeat sales of single-family detached homes. It tracks changes in value of homes across the nation and can influence consumer spending and contribute to the overall GDP of the U.S.
The Indexes are based on data from major metropolitan areas in the United States. They use an adjusted version of the weighted-repeat sales method. This technique adjusts for differences in house size, distance from a city center, amenities, number of bedrooms, and square footage.
The Case-Shiller home price index is a leading indicator of the housing market in the United States. It is calculated each month using a three-month moving average algorithm. The data is based on the purchase prices of thousands of individual houses. It includes data on 16 of the 20 largest metropolitan areas.
The index is a valuable tool for real estate investors and analysts. It provides a measure of the value of existing single-family housing stock and allows for short-term trading. It also gives users access to a unique class of asset.
S&P CoreLogic Case-Shiller Home Price Index
Among its many uses, the S&P CoreLogic Case-Shiller Home Price Index tracks the value of single-family housing across the United States. The Index is based on repeat sales methodology, which takes into account changes in home value over a long period of time, rather than just a few months.
The Index is used to provide an economic signal for real estate markets, and to help users determine the risk of buying a particular property. The indices are published on the last Tuesday of each month. They combine price pairs of thousands of individual homes to create a single index.
The S&P index family is composed of 20 metropolitan area indices. Each of these indices is based on a three-month moving average. Each is normalized to a value of 100 in January 2000. Each is also derived from the sale of homes that were sold through an arm’s length transaction.
The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index is a value-weighted average of 20 metropolitan areas. It covers a larger group of cities than the 10-City Composite, including Atlanta, Cleveland, Detroit, Denver, Minneapolis, Phoenix, Portland (Oregon), and Washington. The 20-City Composite posted a 13.1% year-over-year gain in August.
Fannie Mae Home Price Index
Using data gathered from Fannie Mae and Freddie Mac, the Fannie Mae Home Price Index measures the average quarterly change in prices of single-family homes in the U.S. The index excludes condominiums. In the fourth quarter of 2021, the index reached its fastest annual rate ever on record. The index rose 19.1 percent YOY.
In addition to the HPI, Fannie Mae also produces the Home Purchase Sentiment Index (HPSI), a monthly predictive indicator of consumer attitudes towards buying and renting a home. It distills information from the company’s National Housing Survey and is designed to provide distinct signals about the direction of the housing market.
In October, the Home Purchase Sentiment Index fell 4.1 points compared to the previous month. The index also reflects consumers’ views on housing market conditions and helps industry participants make better business decisions.
Fannie Mae’s chief economist stated that elevated home prices are pushing potential buyers away from the market. Aside from this, rising mortgage rates continue to worsen affordability. The 30-year fixed-rate was 7.29% as of Monday, which is double the rate it was a year ago.
Zillow Observed Rental Index (ZORI)
Using Zillow data, the Zillow Observed Rental Index (ZORI) was created to measure changes in asking rents across the United States over time. It includes all types of homes – single family residences, condos, and townhouses – and controls for seasonal fluctuations in housing stock. The index has grown by 4.4 percent per year over the past five years.
In September, the Zillow Observed Rent Index increased by 10.8 percent. This pushed the ZORI ahead of the general CPI in terms of rent inflation. However, this relationship does not explain why rents have increased so much over the past five years.
Despite a decline in the Basic Allowance for Housing since the beginning of the pandemic, the price of renting a home has continued to increase. According to the Federal Housing Finance Agency, nationwide home prices rose by nearly ten percent in the twelve months between February 2020 and February 2021.
The Zillow Observed Rent Index has been accelerating since the fall of 2020, and it appears to have already overtaken the CPI rent gauge for the first time. The Zillow index has grown by more than 600 bps since its early October peak, and this suggests that 300 more bps are on the way.