A True Measure of House Price Inflation?
Our “Which House Price Index?” paper explains why monthly index estimates of the level of house prices differ from index to index.
Whilst one index estimates e.g. the level of the “price of the average house”, another measures the level of the “average of all prices paid for houses”.
Each index uses different data and a different methodology. Indices report prices at different points in the house buying cycle and report at different dates.
It is widely assumed that, despite these differences, each index can be taken to measure house price change aka house price inflation. Is this so?