econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 08 January 2018

Home Price Winners And Losers

from CoreLogic

-- this post authored by Molly Boesel

Since the U.S. began recovering from the home-price bust in 2006, economists have used the peak-to-current change in prices as a measure of recovery in markets. However, the peak-to-current change hyper-focuses on economic losses for those who bought at the peak. What about consumers who bought homes while prices were at the bottom of the cycle? If someone was lucky enough to buy as a market hit bottom and began to recover, they have seen large home-price gains.

Figure 1 shows the typical view of home price changes. The figure shows the peak-to-trough and peak-to-current changes in the CoreLogic Home Price Index (HPI) for the U.S., the four states with the largest peak-to-current declines, and the four states with the largest peak-to-current gains. In the states where the HPI has passed the pre-crisis peak, the peak used to calculate the numbers in Figure 1 is the pre-crisis peak. The U.S. HPI peaked in 2006, and returned to the 2006 peak in September 2017 [1]. Nevada has the largest peak-to-current decline of any state, and had the largest peak-to-trough decrease at 60 percent. On the other end, North Dakota had a shallow peak-to-trough decline, and has risen 47 percent above the prior peak seen in 2008.

Figure 2 gives a different view of the HPI changes and illustrates the depths of the most notable state-level price declines and the subsequent upward trajectory in those states. Figure 2 shows the peak-to-trough and trough-to-current HPI changes for the U.S. and the seven states that had larger peak-to-trough declines than the U.S. For the nation, from the 2006 peak to the 2011 trough, the loss was 33 percent, but from the 2011 trough to September 2017 the gain was 50 percent. The most extreme drop in the HPI was in Nevada, but prices in that state have gained 89 percent since hitting bottom in 2012. For reference, we can compare the gains in the HPI to gains in the stock market. The S&P 500 fell 51 percent from peak to trough, but has gained 229 percent from the trough through September 2017.

The large price gains since the home-price bottom translate into large amounts of home equity gained by homeowners, improving their balance sheets. As shown in the CoreLogic Homeowner Equity Report, in the 12 months ending in September 2017, the average homeowner gained nearly $15,000 in equity. The seven states shown in Figure 2 had equity gains over the past year, but California and Nevada stand out with the largest gains at $37,000 and $23,000, respectively.

[1] Adjusting for inflation, U.S. home prices 16.4 percent below their peak in September 2017. The Consumer Price Index (CPI) Less Shelter was used to create the inflation-adjusted HPI.

© 2017 CoreLogic, Inc. All rights reserved.

Source

http://www.corelogic.com/blog/authors/molly-boesel/2017/12/home-price-winners-and-losers.aspx

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors








search_box
Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.







Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government




























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved