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Just how bad is the US housing market? The widely followed S&P/Case-Shiller index looks horrible. Its latest figures show prices accelerating downwards. They fell over 14 per cent year-on-year in the first quarter and are down more than 16 per cent from their 2006 peak. Contrast that with data from the Office of Federal Housing Enterprise Oversight that showed prices appreciating less rapidly during the boom and peaking in 2007 – since when they have fallen about 4 per cent. Figures from the National Association of Realtors are somewhere in between.

Which is correct? The short answer is all of them. They measure different things. Both Case-Shiller and Ofheo measure transactions on the same single-family homes over time. Case-Shiller covers 70 per cent of the country, while Ofheo is broader. But Case-Shiller covers more types of purchase, including those with jumbo and subprime mortgages, while Ofheo only measures houses bought with loans conforming to Fannie Mae and Freddie Mac’s criteria. The NAR takes median prices without tracking same house sales, so it can be affected by the mix of houses being sold.

Understandably, gloom-mongers focus on the plunging Case-Shiller index. It is not surprising that it has proved more volatile, given that it includes bigger houses and weights the index according to value of homes purchased. That is likely to make troubled areas such as California, with a big share of jumbo mortgages, more influential. Arguably, it is also the best measure for the overall destruction of US housing wealth. The Ofheo index, however, perhaps gives a better idea of what average Americans are experiencing. The news on that front looks less alarming.

The two indices may tell different stories on the quantum of price falls. But one thing both can agree on is that the pain is spreading nationally and is still getting worse.

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