Home Prices — Going Up 3.2% or Down 3.2%
Kurt Brouwer August 30th, 2007
Now this is confusing. A few days ago we posted on the Case - Shiller Index which showed housing prices falling by 3.2% (see here for the full post). Here was the main point [emphasis added]:
Kelly Evans of the Wall Street Journal reports [emphasis added]:
‘The decline in U.S. home prices accelerated in the second quarter as a glut of unsold homes and tighter lending standards continued to weigh on the market.
Home prices nationwide tumbled an average 3.2% from a year earlier, according to an index compiled by Standard & Poor’s Corp. The decline was sharper than the year-to-year decline in the first quarter, when the S&P/Case-Shiller national home-price index dropped 1.6%…’
Now, we have a report by Damian Paletta and Jeff Bater, also in the Wall Street Journal. Based on data from the Office of Federal Housing Enterprise Oversight (OFHEO). the piece reports that home prices going up–not down–by 3.2%, compared to prices from one year ago.
‘U.S. house prices appreciated 3.2% in the second quarter of 2007 from a year before, the Office of Federal Housing Enterprise Oversight reported Thursday…’
‘…Ofheo said prices rose only 0.1% in the second quarter from the first quarter, the lowest quarterly increase since 1994.
“House prices were basically flat in the second quarter despite tightening credit policies, rising foreclosure rates, and weakening buyer sentiment,” Ofheo director James Lockhart said. “Significant price declines appear localized in areas with weak economies or where price increases were particularly dramatic during the housing boom.”…’
The only thing I can figure is that the OFHEO statistics are lagging indicators or that they are looking at different types of properties. You can view the full report from OFHEO here.
Obviously, one of these dueling reports is going to be shown to be inaccurate. My sense is the Case-Schiller report reflects what I’m seeing better than the OFHEO report. The next quarterly releases on home prices will be very interesting.
Hat tip: MarketBeat Blog
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