Distressed Sales and the FHFA House Price Index

House Price Index Methodologies

Index Revision, House Price Risk, and the Market for House Price Derivatives

It is widely recognized that options and futures markets for housing can reduce and manage the risks inherent in consumers’ large investments in housing equity. The integrity of such markets depends, however, upon the use of transparent and replicable benchmarks for house prices and settlement values. In the USA, a series of state and metropolitan indexes have been produced by a government agen...

Estimating house price growth with repeat sales data: What’s the aim of the game?

Since the seminal work of M. Bailey, R. Muth, and H. Nourse (1963, J. Amer. Statist. Assoc. 58, 933–942), numerous articles have been written about repeat sales and other methods for constructing house price indices. Our justification for producing yet another paper on this subject is to reemphasize fundamentals. We focus on the basic building blocks—asking questions about what the underlying t...

Evaluating a House Price Index Based on the Sale Price Appraisal Ratio (spar) Method

This paper contributes to the literature on the sale price appraisal ratio (SPAR) as an alternative house price index methodology. Housing market transaction data for 12 cities or districts in New Zealand for the period 1994 – 2004 is utilised to test the effect of measurement errors in assessed values on index accuracy and temporal aggregation on index stability. The main findings are: 1) temp...

Depreciation of housing capital, maintenance, and house price inflation: Estimates from a repeat sales model

The rate at which physical capital depreciates is fundamental to investment in the economy. Nevertheless, although housing capital accounts for one-third of the total capital stock, the rate at which housing capital depreciates has only rarely been directly estimated, in part because prior studies do not control for maintenance. For that same reason, widely publicized measures of house price ap...