There have been some questions about – “Why use the Case Shiller index”, and “How does it differ from other indices”. Deutche Bank summarized the differences between the Case Shiller (CS), National Association of Realtors (NAR), and OFEHO indices in the attached writeup from March 2009. Please contact your DB coverage for copies of the full report.
Definitions of three widely used home price indices
The S&P/Case-Shiller Home Price Index (HPI) measures the prices of repeated paired sales of single-family homes in the U.S., excluding refinancings, home improvement and investment purchases. The data underlying the index is retrieved from house deeds recorded at county courts. The S&P/Case-Shiller national HPI is reported quarterly, with a tw0-month lag. At the MSA level, S&P Case-Shiller provides data for 20 MSAs, which is available monthlywith a two-month lag. (This nationwide data is available for free for both national and MSA data series at http://www2.standardandpoors.com). For expanded MSA coverage, additional data can also be purchased from Economy.com (http://www.economy.com/home/products/housepriceforecasts.asp)
The OFHEO House Price Index (HPI) measures paired repeated “sale prices” of single-family homes in the U.S., but also includes refinancings. For a refinancing, the value of the home is based on an appraised value, not an actual buy-sell transaction. Because appraisals can lag the actual market, including appraised values in a home price index along with actual selling prices may create an upward bias when prices are falling. The data underlying the index also covers only conventional conforming mortgages provided by Fannie Mae and Freddie Mac. By excluding jumbo mortgages, the index may also understate deterioration, as (traditionally) higher-priced homes are more volatile. The OFHEO HPI is reported quarterly, with a two-month lag. (Data is available for free at http://www.ofheo.gov/HPI.asp.)
The National Association of Realtors (NAR) House Price Index (HPI) measures the median sale prices for existing single-family homes sold in the U.S. The data underlying the index is retrieved from local associations/boards and multiple listing services nationwide. The NAR HPI is reported quarterly at the MSA level, with a two and a half month lag. The data is alsoavailable monthly at the national and regional level (i.e. Northeast, Midwest, South and West), with a one-month lag. (Data is available for free at http://www.realtor.org/research.nsf/pages/ehspage.) While median data has its limitations, this source is also the most timely.