Home Price Monitor

April 2012
National Association of REALTORS
Research Division Cutting Through the Noise: Various Home Price Measure

Highlights
On a month-to-month basis most home price measures showed growth in February, in a typical seasonal fashion. The exceptions were Case-Shillers 10- and 20-city indexes and CoreLogics HPI which showed small declines. Early measures for March show a more positive month to month trend. More encouragingly, on a year over year basis, price declines were generally smaller across measures in February, and FHFA data showed slight price growth over the year. Early data for March suggest a strengthening of the year over year growth trend. New home prices continue to fluctuate greatly due to low levels of construction and purchase activity and presently show strong growth. Distressed sales, which hold back existing home prices, comprised 29 percent of sales in a recent survey of Realtorsdown from 40 percent a year ago and on the lower end of the range of what has been typical in recent months. This is a positive sign for prices.

Outlook
From a broad perspective, many of the same stabilizing trends continue to drive the outlook. Low inventories, declining delinquency rates, and strong 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 despite tight inventory. Housing permits appear to be picking up, but are still at low levels and construction takes time, so new supply is not yet on the market. Affordability remains high and jobs figures continue to be a positive sign. An improving economy coupled with affordability could provide a needed jolt to primary residence sales and some of this jolt has been seen as sales have improved dramatically over one year ago. Rising apartment rents may make a home purchase the more affordable option for some households, adding to the positive trend for sales and prices.

Home Prices
$280,000 $260,000 $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 NAR Median Sales Price: Total Existing Homes, United States ($) New 1-Family Houses: Median Sales Price (Dollars) FHFA House Price Index: Purchase Only, United States (NSA, Jan-91=100) S&P/Case-Shiller Home Price Index: Composite 20 (NSA, Jan-00=100) S&P/Case-Shiller Home Price Index: Composite 10 (NSA, Jan-00=100) CoreLogic National House Price Index (NSA, Jan.2000=100) 280.00 260.00 240.00 220.00 200.00 180.00 160.00 140.00 120.00 100.00

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Home Price Data Year over Year Change

25 20 15 10 5 0 -5

-10
-15 -20 -25

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Feb-02 May-02 Aug-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12
NAR Median Sales Price: Total Existing Homes, United States ($) New 1-Family Houses: Median Sales Price (Dollars) FHFA House Price Index: Purchase Only, United States (NSA, Jan-91=100) S&P/Case-Shiller Home Price Index: Composite 20 (NSA, Jan-00=100) S&P/Case-Shiller Home Price Index: Composite 10 (NSA, Jan-00=100) CoreLogic National House Price Index (NSA, Jan.2000=100)

Home Price Changes

Feb-12 Feb-12 Mar-12 Mar-12 Next Monthly Annual Monthly Annual Release Change* Change* Change* Change* Date 0.6% 1.0% 0.6% -0.8% -0.8% -0.8% 0.7% 8.7% -0.3% -0.5% 0.4% -3.5% -3.6% -2.0% -0.8% 7.6% 5.3% 4.8% ------1.0% -----2.5% 22-May 1.9% 22-May 23-May 29-May 29-May Mid-May Mid-May 6.3% 23-May

Data Series NAR Median Sales Price: Total Existing Homes NAR Median Sales Price: Existing 1-Family Homes FHFA House Price Index: Purchase Only 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

*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.

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER

Spread of Existing Home Price Changes

Year over Year
10.00 5.00

0.00

-5.00

-10.00

-15.00

-20.00

-25.00

Sources: NAR, Case-Shiller, CoreLogic, FHFA, HAVER

Supply and Demand Factors Inventory

4,500,000 4,000,000 3,500,000 10.0 3,000,000

NAR Total Existing Homes Avail for Sale at EOP, United States (Units, NSA) (left axis)

14.0

12.0

2,500,000
2,000,000 1,500,000 1,000,000 500,000 0

8.0

NAR Months' Supply of Total Existing Homes, United States (Months) (right axis)

6.0

4.0

2.0

0.0

NAR Total Existing Homes Avail for Sale at EOP, United States (Units, NSA) NAR Months' Supply of Total Existing Homes, United States (Months)

Sources: NAR

Supply New Housing Starts and Permits

800 700 600 500 400 300 200 100 0

Housing Starts: 1 Unit (SAAR, Thous.Units)

Housing Units Authorized: 1-Unit Structures (SAAR, Thous.Units)

Sources: Census

Underlying Demand Job Growth and Hires

6,000 5,000 4,000 3,000 2,000 1,000 0 -1,000 -2,000

Change in Total Nonfarm Employment (SA, Thous)

JOLTS: Hires: Total (SA, Thous)

Sources: BLS

Potential Job Growth Openings

4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

JOLTS: Job Openings: Total (SA, Thous)

Sources: BLS

Housing Affordability
25 250.0

NAR Payment as Percent of Income (left axis)

20

NAR Housing Affordability Index: Composite (right axis)

200.0

15

150.0

10

100.0

50.0

0.0

NAR Housing Affordability: Payment as Percent of Income, U.S. (%) NAR Housing Affordability Index: Composite (Fixed + ARM), United States

Sources: NAR

About the Price Data Series

Data Series Strengths/Weaknesses of Data Series NAR Median Sales Price: Total Existing Homes Most timely Data, broad geographic coverage, sourced from MLS and Realtor board NAR Median Sales Price: Existing 1-Family Homes data, data in dollars, total exisiting includes condos and coops Weighted Repeat Sales (WRS) Index, sourced from Fannie/Freddie purchase & FHFA House Price Index: Purchase Only refinance mortgages (excludes FHA, VA, Jumbo, Subprime) S&P/Case-Shiller HPI: Composite 20 WRS Index, sourced from County recorder data, weighted by property value; quarterly national index (not shown), monthly 10 and 20-city metro indexes and S&P/Case-Shiller HPI: Composite 10 composites are 3 month moving averages CoreLogic National HPI Weighted Repeat Sales Index, sourced from database of loan servicing and County CoreLogic National HPI - Distressed Excluded recorder data New 1-Family Houses: Median Sales Price Based on home builder interviews in the Survey of Construction

Sources: NAR, Case-Shiller, CoreLogic, FHFA, Census, HAVER