Home Price MonitorJanuary 2012

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

Highlights• On a month-to-month basis home prices rose slightly in November as

measured by NAR, FHFA, and CoreLogic’s distressed-excluded measure. Declines in November were measured by Case Shiller and CoreLogic’s full market index. On a year over year basis, small declines persist across measures in November within the range that has been typical of recent months.

• NAR data show a monthly increase for December and suggest that the decline from December one year ago is smaller than in the 2 previous months.

• New home prices continue to fluctuate greatly due to low levels of construction and purchase activity.

• Distressed sales, which hold back existing home prices, comprised 32 percent of sales in a recent survey of Realtors—down from nearly 40 percent a year ago but slightly above the recently typical 30 percent mark. The seasonal slowdown in sales may explain the increase in distressed sales as a share of total sales even as the number of distressed sales remains largely constant.

• The increase in the share of distressed sales may lower reported transaction prices somewhat—especially as seen in the Case-Shiller and CoreLogic indexes.

Outlook• From a broad perspective, many of the same trends continue to

dominate the outlook. Low inventories, declining delinquency rates, and stable or increasing foot traffic should help to support prices, though buyers searching for the right home may have fewer options from which to choose. Very limited new construction means that buyers initially searching for a new home may find more selection among existing homes.

• Client pricing expectations may continue to present challenges. Data from the Profile of Home Buyers and Sellers show that sellers typically sold their homes for 95% of the listing price, and 61% reduced the asking price at least once.

• Affordability remains high and job hiring data is showing signs of improvement. An improving economy coupled with affordability could provide a needed jolt to primary residence sales. In fact, blue-chip economists believe that a technical bottom to the market is at hand.

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

Nov-11 Monthly Change*

Nov-11 Annual Change*

Dec-11 Monthly Change*

Dec-11 Annual Change*

Next Release Date

NAR Median Sales Price: Total Existing Homes 2.0% -3.6% 0.3% -2.5% 22-FebNAR Median Sales Price: Existing 1-Family Homes 1.8% -4.0% 0.7% -2.5% 22-FebFHFA House Price Index: Purchase Only 0.8% -1.8% -- -- 23-FebS&P/Case-Shiller HPI: Composite 20 -1.3% -3.7% -- -- 28-FebS&P/Case-Shiller HPI: Composite 10 -1.3% -3.6% -- -- 28-FebCoreLogic National HPI -1.4% -4.3% -- -- Mid-FebCoreLogic National HPI - Distressed Excluded 0.2% -0.6% -- -- Mid-FebNew 1-Family Houses: Median Sales Price -2.4% -1.8% -2.5% -12.8% 16-Feb

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