Data Corner: Home Price Indices

Data Corner: Home Price Indices

EconSouth

Browse back issues of this publication by date

September 22, 2012 | Copyright

Fluctuations in home values affect household wealth. In turn, household wealth can significantly affect the economy through consumer spending and saving behavior, the availability of credit, and employment in the residential sector (see this issue's "Fed @ Issue," which discusses these connections). Given the strong ties between the housing market and the health of the economy, tracking the movement of prices over time by using a home price index can be very informative.

Constructing a home price index, however, is more involved than constructing price measures for other types of goods, because each home is unique and infrequently traded. Reconciling these two particular aspects is challenging because existing data sources have incomplete and uneven coverage of home prices. …

To read the full text of this article and others like it, subscribe today!