Case–Shiller index
The S & P / Case- Shiller Home Price Index is calculated by Standard & Poor's, reflects the price trend in the U.S. real estate market.
- 3.1 Historical Overview
- 3.2 Annual Development 3.2.1 20 -City Composite Index
- 3.2.2 U.S. National Home Price Index
Concept
The Standard & Poor's Case- Shiller Home Price displaced Index is the leading real estate index in the United States. It shall be published for a number of markets monthly. Here are 20 individual indices that each house price development of an American metropolitan area are aggregated into two groups: an index for the 10 most important regions and an index of all the 20 regions. Furthermore, there is a nationwide residential property index, which is collected on a quarterly and 9 different U.S. Census Divisions contains. Overall, the index family consists of 23 indexes.
The concept developed economists Karl E. Case, Robert J. Shiller and Allan Weiss in the 1980s. Since 2002, Standard & Poor's calculates the index. Options and futures, which are based on the Case-Shiller index are traded on the Chicago Mercantile Exchange. Because the index of real estate in urban areas concentrated with corresponding high prices, it is more volatile than national indices. For example, forms the FHFA House Price Index (formerly OFHEO House Price Index ), published by the Federal Housing Finance Agency ( FHFA ), the rural areas better.
A disadvantage of all house price indices, but that although they are in detail due to the amount of data to 2 months after completion of the study period are published. House price indices have a slightly negative correlation with stocks and bonds, as well as a slightly positive correlation with commodities and real estate investment trusts ( REITs). The correlation with REITs is low. The financial markets are sensitive to unexpected changes in the index, it is perceived as an indicator of the development on the U.S. real estate market. Case-Shiller Index, FHFA House Price Index or NAHB / Wells Fargo Housing Market Index belong to the group of indicators that influence their development are identifiable, the stock indices.
Composition
Overview
Metropolitan areas compared
The table shows the highs and lows in the metropolitan areas during the housing crisis.
History
Historical Overview
The U.S. National Home Price Index was first published in 1987. The return statement was to 1953 (quarterly) and to 1890 (annual). From 1890 (3.66 points) to 1925 (6.50 points), housing prices in the U.S. rose by 77.6 percent. It should be noted that all data refer to the nominal prices in U.S. dollars of each collection period, so are not adjusted for inflation.
Four years before the global economic crisis, prices began to fall. They reached a low point in 1933 with 4.52 points. The decline since 1925 is 30.5 percent. In the following decades, the value of residential real estate in the U.S. has grown steadily. In June of 2006, the U.S. National Home Price Index with 189.93 points, an all time high. Thus, the house prices rose throughout the period to 4102 percent. The index for 20 metropolitan regions (Composite -20) in July 2006 marked with 206.52 points, a historic high.
A long price increase phase in the real estate market had developed in the United States to a property bubble. With the falling real estate prices, the financial crisis starting in 2007 became acute. At the same time, more and more borrowers could no longer service their mortgage payments, partly because of rising interest rates, partly because of lack of income. First of these were problems in the housing sector primarily affected subprime loans that were awarded primarily to borrowers with lower credit ratings. The speculative bubble burst. The banks were sitting on their loans.
The housing crisis prompted the U.S. government in 2008 to take over the control of the two largest mortgage lenders in the U.S., Fannie Mae and Freddie Mac. It came to price declines in the global equity markets. Because by selling bad loans ( securitization ) these were scattered all over the world, the crisis spread globally through the close integration of individual economies and financial flows. Marked In March 2009, the U.S. National Home Price Index with 129.17 points, a low point. The 20- City Composite Index gained 139.26 points in April 2009 with a record low.
In March 2012, the national Case- Schiller index fell to 124.01 points and reaching its lowest level since June 2002. Since the all-time high in June 2006, therefore, the decline in national house prices is nominally 34.7 percent. It is the largest price drop on the U.S. real estate market since 1890. While the index of 20 metropolitan areas fell in February 2012 to 134.07 points and thus on the level of October 2002. Loss since the all time high of July 2006 is 35.1 percent. Many potential home buyers in the U.S. were over-indebted. Because the value of their property had fallen, they could no longer service their mortgages. Foreclosures and distressed sales rose to record levels nationwide. The high unemployment rate and the strict award criteria for mortgages weighed on the market.
Annual development
20 -City Composite Index
The table shows the development of the non-seasonally adjusted data for the 20 -City Composite Index since 2000.
¹ October 30, 2012
U.S. National Home Price Index
Subsequently, the development of the non-seasonally adjusted data from the back-calculated to 1890 U.S. National Home Price Index.