Financial market intelligence company Standard & Poor’s has announced the launch of a quarterly U.S. National Home Price Index that tracks single-family home prices in all nine U.S. Census divisions.
Those divisions are: East North Central, East South Central, Middle Atlantic, Mountain, New England, Pacific, South Atlantic, West North Central, and West South Central.
The data will be released at 9 a.m. Eastern Time on the final Tuesday of February, May, August and November at the www.homeprice.standardandpoors.com Web site.
Condominiums and co-ops are specifically excluded from the index. Homes included in the index must have two or more recorded arms-length, or fair-market-value, transactions, Standard & Poor’s announced. Also, no appraisal data are used and new construction is excluded.
The index is generated and published through agreements between Standard & Poor’s, Fiserv and MacroMarkets LLC.
Standard & Poor’s will continue to publish its 10-city and 20-city composite indices on a monthly basis along with individual metro area indices.
Each index combines matched price pairs for thousands of individual houses from the available database of arms-length sales data, the company announced. The indices had a base value of 100 in January 2000 — a current index value of 150 translates to a 50 percent appreciation rate since January 2000 for a typical home located within the subject market, according to the company announcement.
The S&P/Case-Shiller Composite of 10 Home Price Index is a value-weighted average of the 10 original metro-area indices, the Composite of 20 Home Price Index is a value-weighted average of all metro-area indices, and the U.S. National Home Price Index is a value-weighted average of all U.S. Census Division indices.
“For most Americans, their home is one of their most important assets. In a time like now when there are mounting questions about the future direction of the overall housing market and its impact on the economy, an accurate measure of national home values is particularly important,” said David Blitzer, managing director and chairman of the index committee at Standard & Poor’s, in a statement.
“Standard & Poor’s is pleased to expand the coverage of our S&P/Case-Shiller Home Price Indices to include a comprehensive, national measure of the value of single-family homes across the United States.”
And Robert Shiller, chief economist of MacroMarkets, said in a statement, “This index is truly the gold standard for measuring value changes in overall U.S. housing. For the first time, market observers and global investors will have a readily available national index that correctly follows the value of investments in housing through time, providing a true measure of value that captures all market segments — regardless of financing type.
“The wide universe of recent home-sale transactions — not merely the significantly diminished portion associated with conforming mortgages — is reflected in this and other S&P/Case-Shiller Home Price Indices. Now more than ever, the market cannot afford to ignore the significant impact that home values securing the collectively dominant subprime, jumbo, other nonconforming and portfolio mortgages have on real estate price trends and the economy at large.”