Delays in Statistics Can Be Misleading
With a two-month lag, the government said home values rose 0.7% in November.
But before you go too deep into the FHFA’s Home Price Index, it’s important that we recognize its shortcomings; the most important of which is its lack of real-time reporting.
According to the National Association of Realtors™, 80 percent of purchases close within 60 days. As an obvious result, because of its two-month delay, the Home Price Index report actually trails today’s market data by an entire sales cycle.
This is one reason why home values appear to be rising even while new data shows that both Existing Home Sales and New Home Sales fell flat last month. The home valuation report is using data from November; the sales reports are using data from December.
3 Reasons to Buy Now
The Home Price Index is a trailing indicator and next month, as the Spring Market gets underway, the government will be reporting data from the holidays.
The same is true for the Case-Shiller Index. It, too, operates on a two month lag.
Even with all of that said, long-term trends do matter in housing and the Home Price Index has shown consistent improvement over the last 10 months. In many markets, home sales are up, home supplies are down, and values have increased. This trend should continue into the early part of 2010, at least.
If you’re wondering whether now is a good time to buy a home in Des Moines , consider low prices, cheap mortgages and an available tax credit as three good incentives. By May, none of them will likely be available.
If you’d like personal assistance on your home purchase, please contact me at all of the information to the right.
Related Posts
The Spring Buying Season is Well Underway
Home sales are up 12%. Now for the bad news…
Expect a Strong Spring Market Based on the Pending Home Sales Index
A Surge in New Home Sales is Expected Over the Next 6 Months
Nationwide Average Home Values Slipped in October
Home Prices Likely to Rise as Inventories Continue to Plummet
