Home Price MonitorNovember 2011

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

Highlights• The typical seasonal month-to-month decline seen in NAR’s September

home price data is now seen among other home price measures. The notable exceptions are the FHFA price index and the CoreLogic distressed-excluded house price index which each showed a small increase for the month.

• Compared to one year ago, however—a comparison that helps us see past seasonal fluctuations—price change remains roughly stable. September data show a 1-4 percent year to year decline, about the same as August.

• NAR data suggest that the decline from October one year ago may be somewhat larger than September, but will be within the range of what has been seen this year.

• New home prices continue to fluctuate greatly due to low levels of construction and purchase activity. As called for in last month’s monitor, new homes saw an increase in prices compared to October one year ago, but continued volatility will be the norm in the near future.

• 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. The seasonal slowdown may lead to an 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 bring reported transaction prices down somewhat.

Outlook• Low inventories, declining delinquency rates, and relatively stable

buyer 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. New data recently released 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 opening and hiring data are showing signs of improvement. An improving economy coupled with affordability could not only provide a needed jolt to primary residence sales, but may also spur investment and vacation home purchases. New NAR data on these types of sales will be out in the first quarter of 2012.

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

Sep-11 Monthly Change*

Sep-11 Annual Change*

Oct-11 Monthly Change*

Oct-11 Annual Change*

Next Release Date

NAR Median Sales Price: Total Existing Homes -3.2% -3.3% -2.0% -4.7% 21-DecNAR Median Sales Price: Existing 1-Family Homes -3.4% -4.1% -2.3% -5.8% 21-DecFHFA House Price Index: Purchase Only 0.7% -2.1% -- -- 22-DecS&P/Case-Shiller HPI: Composite 20 -0.6% -3.6% -- -- 27-DecS&P/Case-Shiller HPI: Composite 10 -0.4% -3.3% -- -- 27-DecCoreLogic National HPI -1.1% -4.1% -- -- Mid-DecCoreLogic National HPI - Distressed Excluded 0.3% -1.1% -- -- Mid-DecNew 1-Family Houses: Median Sales Price -2.0% -6.4% -0.5% 4.0% 23-Dec

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