House price index
From Wikipedia, the free encyclopedia
A House Price Index (HPI) measures the price of houses.
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[edit] IAS360
- See also: IAS360 House Price Index
IAS360 House Price Index Provides First Monthly View of Housing Price Trends Based on Neighborhood Level Data.
Integrated Asset Services (IAS), a leader in default management and residential collateral valuation, just launched its monthly-reported IAS360 House Price Index http://www.iasreo.com/ias360.html
The new Index represents the industry’s first clear representation of U.S. housing market trends at a county level. IAS360 House Price Index is a comprehensive housing index tracking monthly change in the median sales price of detached single-family residences in more than 15,000 “neighborhoods” across the U.S. This data is then rolled up to report on the changes in 360 counties, nine census divisions, four regions, and the nation overall. The timeliness of the data, which is based on all arms-length transactions occurring in underlying neighborhoods, makes the IAS360 the leading indicator for housing price trends in the U.S. April Index: http://www.iasreo.com/ias3600408.html
[edit] UK
House Price Indices (HPIs) have been produced in the UK since around 1973 and have traditionally been generated by governmental bodies as part of official statistics and mortgage lenders as part of their marketing and public relations efforts. In more recent times, property market websites have begun to produce them. There are two dominant methods of indexation, the Hedonic regression (also known as the characteristic based) Method and Repeat Sales Regression.
A number of house price indices exist in the UK, which are calculated by a variety of different players in the UK Property Market.
[edit] Governmental house price indices:
The Land Registry House Price Index (calculated on behalf of HM Land Registry by Calnea Analytics) uses Land Registry’s own data, which consists of the transaction records of all residential property sales in England and Wales. The number of monthly transactions is approximately 100,000 per month. It is the only index in the UK to use the Repeat Sales Regression (RSR) technique.
The DCLG index (formerly ODPM) uses the mix-adjusted method, which is based on weighted averages. The data used in this HPI is mortgage completion data supplied by a few large lenders.
[edit] Private sector house price indices
The Nationwide House Price Index and Halifax House Price Index, are calculated by the respective Banks and Building Societies. They use Hedonic regression (also known as the characteristics based method), to establish changes in the property market, using their own internal datasets compiled from their mortgage lending.
The Nationwide and Halifax have a longer time-series than the Governmental HPIs.
[edit] Current UK indices
| Index | Calculated by | Source data | Observations (approx) | Quality Adjustment Method | Local Indices | Frequency | Price Observations |
|---|---|---|---|---|---|---|---|
| HM Land Registry | Calnea Analytics | HM Land Registry | 100k | RSR | Yes | Monthly | Actual price paid |
| DCLG | DCLG | Lender data | 45k | SMA | Regional Only | Monthly | Mortgage completions |
| Halifax | Halifax | Loan approvals | 12k | HR | Regional Only | Monthly | Valuation at time of loan approval |
| Nationwide | Nationwide | Loan approvals | 12k | HR | Regional Only | Monthly | Valuation at time of loan approval |
| HomeCo | Calnea Analytics | Asking prices online | 100k | SMA | Regional Only | Monthly | Asking price |
| Rightmove | Rightmove | Asking prices online | Undisclosed | SMA | Regional Only | Monthly | Asking price |
| Financial Times | Acadametrics | Land Registry | 100k | SMA | No | Monthly | Actual price paid |
[edit] Ireland
In the Republic of Ireland, Permanent TSB (a large mortgage lender) and the Economic and Social Research Institute (a think-tank) have published a monthly houseprice index since January 1996.
[edit] S&P/Case-Shiller Indexes
- See also: Case-Shiller index
In the USA, main HPI measures the cost of single-family houses and is published by the Office of Federal Housing Enterprise Oversight.
The HPI is measured monthly and tracks repeat sales of houses using a modified version of the weighted-repeat sales methodology proposed by Karl Case and Robert Shiller. This means that, to a large extent, it is able to adjust for the quality of the homes sold, unlike simple averages.
The HPI was developed in conjunction with OFHEO's responsibilities as a regulator of Fannie Mae and Freddie Mac. It is used to measure the adequacy of their capital against the value of their assets, which are primarily home mortgages.
[edit] Resources:
Downie, M. L. & Robson G. (2007) Automated Valuation Models: an international perspective. Pp 11 Council of Mortgage Lenders, London, ISBN: 1-905257-12-0.
Lim, S. & Pavlou M. (2007) An improved national house price index using Land Registry data. RICS research paper series: Volume 7 Number 11. Pp 10-14. London, ISBN: 978-1-84219-347-1. http://www.rics.org/Knowledgezone/Researchandreports/Land+Registrty+paper.htm Accessed 21 November 2007.
How is the HPI calculated? (2007) http://www.landreg.gov.uk/kb/Default.asp?ToDo=view&catId=32&questId=339 Accessed 29 November 2007
