The news can be a terrible place to get news — especially when it comes to housing and home values.
The most widely-cited tracker of U.S. home values is a report called the S&P CoreLogic Case-Shiller Home Price Index. It shows home values percent over the last 12 months nationwide.
Home buyers should ignore this reading completely.
The Case-Shiller Index is a summary report of the 120 million homes that make up the U.S. housing market. Averaging those homes into a single, national number might be useful to economists and policy-makers, but it’s unhelpful to individual home buyers who will purchase just a single property.
That’s not the only reason to ignore the S&P CoreLogic Case-Shiller Home Price Index. The home price data that makes up the report is also irrelevant.
- Data is limited 20 metro areas, dominated by cities in California and Florida
- Data comes from real estate contracts that are much as six months old
- Data excludes newly-built houses, condos, multi-unit properties
The Case-Shiller Index is a narrow, outdated look at U.S. housing, and it provides none of the specific information that today’s home buyers need.
It also doesn’t provide data about homes in a particular neighborhood, or on a given street; or, whether a specific house is under- or over-priced; and, it doesn’t offer advice about whether home values will rise or fall in the future.
Mass-produced housing reports like the Case-Shiller Index look backward and help the people who model out housing. They don’t help people like you who want to know what’s happening right now.
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