March 2008
home price indices
Index Methodology
s&p/case-shiller
Standard & Poor’s: S&P/Case-Shiller Home Price Indices Methodology
1
Table of Contents
Introduction
3
Partnership
3
Highlights
3
Eligibility Criteria
5
Inclusions and Exclusions
5
Index Construction
6
Approaches
6
Index Calculations
6
The Weighting of Sales Pairs
7
Metro Areas
8
Composites
10
Calculating Composite Index History
10
Calculating the Composite Indices with Normalized Weights
14
Index Construction Process
16
Pairing Sales and Controlling Data Quality
17
The Division of Repeat Sales Pairs into Price Tiers
18
The Weighting of Sale Pairs
19
Repeat Sales Methodology
21
Introduction
21
Value-Weighted Arithmetic Repeat Sales Indices
21
Interval and Value-Weighted Arithmetic Repeat Sales Indices
23
Pre-Base and Post-Base Index Estimation
25
U.S. National Index Methodology
27
Introduction
27
Calculating U.S. National Index History
27
Census Division and State Coverage
29
Standard & Poor’s: S&P/Case-Shiller Home Price Indices Methodology
2
Calculating the U.S. National Index with Normalized Weights
31
Updating the U.S. National Index
31
Updating the Base Weights
31
Index Maintenance
33
Updating the Composite Indices
33
Updating the Base Weights
33
Revisions
33
Base Date
33
Index Governance
34
Index Committee
34
Index Policy
35
Announcements
35
Holiday Schedule
35
Restatement Policy
35
Index Dissemination
36
Tickers
36
Web site
37
S&P Contact Information
38
Index Management
38
Media Relations
38
Index Operations & Business Development
38
Disclaimer
39
Standard & Poor’s: S&P/Case-Shiller Home Price Indices Methodology
3
Introduction
The S&P/Case-Shiller Home Price Indices are designed to be a reliable and consistent
benchmark of housing prices in the United States. Their purpose is to measure the
average change in home prices in a particular geographic market. They are calculated
monthly and cover 20 major metropolitan are