USA Today reported that the 3.1 percent year over year price decline in the Office of Federal Housing Enterprise Oversight's House Price Index was the largest decline in the index's 17-year history. Actually, there is data from the index going back to 1976, giving it a 32-year history. I'm sure this was an innocent mistake but it should be corrected. The sharp price decline in house prices over the last 18 months really are extraordinary, and are without precedent since the Great Depression. News reports should make this point clear to their audiences. [Okay, put this in the "never mind" category. An alert reader pointed out to me that the 17 year history referred to the OFHEO purchase index. OFHEO produces their House Price Index based on both purchases and refinanced homes. The prices used in the latter case are appraised prices, not actual sale prices. There are good reasons for believing that the sale prices give a better sense of the market than the appraisals. For this reason, OFHEO began to report the a separate index based only sale prices in 1991, 17 years ago. So, USA Today is absolutely right, the index is just 17 years old.
--Dean Baker
