Understanding house price changes
So, what’s going on with house prices?
As of March 11, 2023, as the data trickles in, we know the following:
- For February 2023, Realtor.com reported an annual 7.8% increase in the median price of homes for sale.
- For January 2023, Zillow’s US Home Value Index was up 8.7%, while the Census Bureau reported a -0.7% decline in the median sales price of new houses. Freddie Mac’s House Price Index was in the middle, with a 2.4% year-over-year increase.
- For December 2022, the US Case-Shiller index was up 5.8%. The Federal Housing Finance Agency reported two numbers — an 11.8% increase based on the All Transactions HPI and a 6.6% increase based on the Purchase Only HPI.
Summary of 12-month change in US house prices as of March 11, 2023
As of | Source | Y-O-Y Change |
---|---|---|
Feb 2023 | Realtor.com Median Listing Price | 7.80% |
Jan 2023 | Zillow Home Values Index | 8.70% |
Jan 2023 | CoreLogic Home Price Index | 5.50% |
Jan 2023 | Black Knight Home Price Index | 3.40% |
Jan 2023 | Freddie Mac House Price Index | 2.40% |
Jan 2023 | Redfin Median Sale Price | 1.40% |
Jan 2023 | NAR Median Sales Price – Existing Homes | 1.30% |
Jan 2023 | Census Bureau Median Sales Price – New Houses | -0.70% |
Dec 2022 | FHFA All-Transactions House Price Index | 11.80% |
Dec 2022 | FHFA Purchase Only House Price Index | 6.60% |
Dec 2022 | S&P/Case-Shiller Home Price Index | 5.80% |
So, what’s going on with house prices?
For December 2022, the year-over-year change ranged from 11.8% to 5.8% – a 6 percentage point range. For January 2023, the range was 9.4 percentage points – from 8.7% to -0.7%.
None of these numbers are wrong. The differences are due to technical details such as the composition of houses included in the calculation, the methodology, seasonal adjustment, and smoothing. Sometimes, the differences can yield conflicting insights, as with the January 2023 print: the median sales price of new houses declined by 0.7% while the median sales price of existing homes increased by 1.3%.
So, what’s going on with house prices?
HousingIQ has developed the House Price Appreciation Indicator (HPAI) to answer this question. The HPAI provides a monthly headline number that reflects underlying house price changes at the national, state, and metro levels. The HPAI abstracts away the noise and summarizes ground truth.

So finally, we have an answer to the question: what’s going on with house prices?
In January 2023, house prices were up 4.1% compared to a year ago. Annual house price gains peaked at 18.9% in July 2021 and have slowed each month since April 2022.
Assessing the accuracy of the House Price Appreciation Indicator
Plenty of indexes measure house price changes at a national level. As we mentioned above, they can report varied numbers on different schedules and don’t always agree. Below, we compare the HPAI to several indexes.
S&P/Case-Shiller US Home Price Index
The S&P/Case-Shiller Home Price Indices are widely regarded as the gold standard. They are available at the national level and also for twenty major cities.

Overall, the US HPAI tracks the US S&P/Case-Shiller index very well. The median divergence between the S&P/Case-Shiller and the HPAI is 0.7%. Their largest divergence was 4.1% in February 1990. The HPAI can explain 97% of the variance in the Case-Shiller index.
Federal Housing Finance Agency US All Transactions Index
The Federal Housing Finance Agency (FHFA) indices are published quarterly based on mortgages purchased or securitized by Fannie Mae or Freddie Mac. They are available at the national, state, and metro levels.

Overall, the US HPAI tracks the FHFA All Transactions index quite well. The median divergence between the FHFA and the HPAI is 0.9%. Their largest divergence was 7.6% in March 2010. The HPAI can explain 81% of the variance in the FHFA index.
Median Sale Price of Existing Homes
The median sale price of existing homes regularly grabs headlines because of its proximity to consumer experience and its actual/factual nature. Various industry participants report it at the national, state, and sub-regional levels. Here, we compare the US HPAI to data available from Redfin.com.

Annual changes in the median sale price are more volatile than the HPAI. Overall, the US HPAI tracks the median sale price of existing homes with a median divergence of 1.2%. Their largest divergence was 5% in June 2021. The HPAI can explain 80% of the variance in the median sale price.
Median Sales Price of New Houses
The Census Bureau reports the median sales price of new houses every month. Trends in new house prices lead existing home sale price metrics and are an important barometer of the economy.

New house sales prices are very noisy. But they are factual and must not be ignored. Overall, the US HPAI captures the trend in new house sales prices. The median divergence is 2.2%. Their largest divergence was 13.2% in Jan 2019. The HPAI can explain 56% of the variance in the median sale price of new houses.
Comparison between HPAI and other metrics
Metric | Kendall’s Tau | Spearman’s Rho | R2 | RMSE | MAE | MdAE |
---|---|---|---|---|---|---|
S&P/Case-Shiller | 0.89 | 0.98 | 0.97 | 0.0100 | 0.0079 | 0.0066 |
FHFA All-Transactions | 0.73 | 0.88 | 0.81 | 0.0207 | 0.0143 | 0.0094 |
Sale Price-Existing Homes | 0.69 | 0.86 | 0.80 | 0.0196 | 0.0153 | 0.0125 |
Sales Price-New Houses | 0.52 | 0.70 | 0.56 | 0.0356 | 0.0273 | 0.0222 |
Conclusion
The HousingIQ House Price Appreciation Indicator (HPAI) provides a comprehensive and reliable gauge of the housing market at the national, state, and metro levels. With nearly fifty years of history, the HPAI provides granular insights that are timely and actionable. Its accuracy has been demonstrated by its ability to track other metrics, such as the S&P/Case-Shiller, FHFA HPI, and the median sales prices of new and existing homes.
Contact us to learn how you can make better-informed decisions about the housing market with HousingIQ’s reliable and up-to-date information.
Methodology TL;DR
The HPAI is implemented as a dynamic factor model.
The model ingests multiple data points from public and private sources that reflect house price dynamics.
All data are monthly.
HPAI reports the 12-month log difference in house prices.
HPAI is published at the national, state, and metro levels.
The model is refreshed weekly to incorporate the latest available information concerning house prices.