Economist's Commentary: September 23, 2008

Quick Take on the Economy: September 23, 2008

By Danielle Hale, Research Economist

According to the OFHEO House Price Index for July that was released today, U.S. home prices fell 0.6 percent on a seasonally-adjusted basis from June to July. For the 12 months ending in July, U.S. prices fell 5.3 percent per OFHEO's measure
NAR's measure of prices for July, which was released August 25, showed a decline of 7.7 percent across the United States in the last year. Case Shiller's release for July which will be an average of data from May, June, and July, will be released a week from today.

In July, prices were still declining whether one uses the NAR measure or the OFHEO measure.
Differences in the size of the measured change result because NAR's median house price captures homes listed in Multiple Listing Services (MLSes) while OFHEO's HPI captures only homes with conventional, conforming mortgages purchased by Fannie or Freddie. Also, OFHEO employs a "weighted repeat sales" procedure to adjust for quality whereas NAR reports a straight median. The OFHEO procedure is more complicated and contributes to the longer lag time in their data. For more information on various measures of home prices, see this commentary.
Stay tuned tomorrow to see NAR's Existing Home Sales report for August.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

Comments? Questions? E-mail NAR Research.

NAR members, learn how you can add this commentary to your Web site, blog, or newsletter. Read more >