Econintersect: CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.9% year-over-year year-over-year (reported up 1.7% month-over-month). There is considerable backward revision in this index which makes monthly reporting problematic. CoreLogic HPI is used in the Federal Reserves’s Flow of Funds to calculate the values of residential real estate.

Dr. Frank Nothaft, chief economist at CoreLogic stated:

Home sales continued their brisk rebound in July and home prices reflected that, up 6.9 percent from a year ago. Over the same period, the National Association of Realtors reported existing sales up 10 percent and the Census Bureau reported new home sales up 26 percent in July.

Anand Nallathambi, president and CEO of CoreLogic stated:

Low mortgage rates and stronger consumer confidence are supporting a resurgence in home sales of late. Adding to overall housing demand is the benefit of a better labor market which has provided millennials the financial independence to form new households and escape ever rising rental costs.

Comparison of Home Price Indices – Case-Shiller 3 Month Average (blue line, left axis), CoreLogic (green line, left axis) and National Association of Realtors (red line, right axis)

The way to understand the dynamics of home prices is to watch the direction of the rate of change – and not necessarily whether the prices are getting better or worse. Home prices are improving – and the rate of growth is now marginally improving after almost a year of declining growth rate.

Year-over-Year Price Change Home Price Indices – Case-Shiller 3 Month Average (blue bar), CoreLogic (yellow bar) and National Association of Realtors (red bar)

Caveats Relating to Home Price Indices

There is no such thing as an “accurate” home price index. CoreLogic HPI is a repeat sales type index which should not be skewed by changes in the mix of home sales.

For more information, please read: House Price Indexes

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