CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.7 % year-over-year (reported up 0.9 % month-over-month). CoreLogic HPI is used in the Federal Reserves’ Flow of Funds to calculate the values of residential real estate.
Analyst Opinion of CoreLogic’s HPI
CoreLogic year-over-year rate of growth has been steady for three years – with a higher number issued initially and later downwardly revised in the following months.
Dr. Frank Nothaft, chief economist for CoreLogic stated:
In July, home price growth in the Pacific Northwest and mountain states led the nation with the highest appreciation rates. The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.
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Frank Martell, president and CEO of CoreLogic stated:
Home prices in July continued to rise at a solid pace with no signs of slowing down. The combination of steadily rising purchase demand along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of this year. While mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued.
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)
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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 price rate of growth is now marginally improving.
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)
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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 here.
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