How the Case-Shiller Home Price Index & the OFHEO HPI Differ

The OFHEO (Office of Federal Housing Enterprise Oversight) has published information about the differences in their methodology from that of the Case-Shiller® Home Price Index. Here are some of the points made:

Case-Shiller only uses purchase prices, while the All-Transaction OFHEO HPI also uses refinance appraisals.

Case-Shiller mortgage data comes from county records, while OFHEO uses conforming mortgage data from Fannie Mae and Freddie Mac.

Case-Shiller is value-weighted, giving more weight to higher priced homes, while OFHEO equally weights all prices.

Case-Shiller has no data from 13 states, while OFHEO covers all states; important when some areas are growing rapidly.

At times, one of these indexes can show a trend of increasing prices, while the other can show the opposite. So these differences should be carefully considered when you're deciding on information on which to make investment decisions.