The Pending Price Index (PPI) developed by CoreLogic uses the contract date rather than the close date that is used when calculating Home Price Index (HPI). Staffer Bin He takes a look at an analysis that shows how a 10-city composite PPI correlates and leads to the corresponding HPI.

PPI signaled a peak in prices months before the HPI showed one before the housing crisis and also signaled a bottom. Take a look at its near-term housing market forecast:

Figure 4 shows the projected5 and actual year-over-year changes for the 10-city composite index. The projection - based on the Pending Price Index - gave a fairly accurate forecast of what actually happened. We can also see that the year-over-year change for most of 2016 had been around 7 percent and the projected appreciation would remain at the 6 and 7 percent range in October and November.

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