Applying Seasonal Adjustments to Housing Markets

William Doerner and Wenzhen Lin

No 22-03, FHFA Staff Working Papers from Federal Housing Finance Agency

Abstract: House price seasonality has been increasing over the last decade, but adjustments have remained largely unchanged in commonly used public data. This paper shows how seasonal adjustments work -- both theoretically and applied to observed transactions -- when constructing house price indices (HPI). In this paper, we find the seasonality in the housing market is not uniform across geographies. Evidence is provided about where adjustments are more necessary, how often they should be recalculated, and how the weather-related variables, social and industry characteristics impact difference between adjusted and non-adjusted HPI. Using the Federal Housing Finance Agency (FHFA)'s entire suite of public indices, we update adjustments that have been provided by the FHFA and offer new adjustments for over 400 metropolitan areas and other geographies, which haven't been provided before. We find the difference between previous and updated adjusted indices are relatively small, with slightly improvement in recent years.

Keywords: seasonality; house price; real estate valuation; X-13 (search for similar items in EconPapers)
JEL-codes: C5 E3 R1 R3 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2022-11
New Economics Papers: this item is included in nep-ure
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Published in Cityscape, 2022, volume 24, number 3, pages 87-122

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https://www.fhfa.gov/document/wp2203.pdf (application/pdf)
https://www.fhfa.gov/research/papers/wp2203 (text/html)
https://www.huduser.gov/portal/periodicals/cityscape/vol24num3/ch4.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:hfa:wpaper:22-03

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