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posted on 03 January 2017

November 2016 CoreLogic Home Prices Year-over-Year Growth Rate Now Improved to 7.1%.

CoreLogic's Home Price Index (HPI) shows that home prices in the USA are up 7.1 % year-over-year year-over-year (reported up 1.1 % month-over-month). Last month's 6.7 % year-over-year gain was revised downward to 6.1 %. CoreLogic HPI is used in the Federal Reserves's Flow of Funds to calculate the values of residential real estate.

Analyst Opinion of CoreLogic's HPI

CoreLogic has been revising their data significantly downward in the following month - I would not take the 7.1 % to the bank. However, I would be comfortable suggesting that next month we will discover that the 7.1 % was really 6.2 % (similar to what happened this month). Overall, home price growth trends seem to be marginally trending up - likely do to the low inventory levels of homes for sale.

Dr Frank Nothaft, chief economist for CoreLogic stated:

Last summer's very low mortgage rates sparked demand, and with for-sale inventories low, the result has been a pickup in home-price growth. With mortgage rates higher today and expected to rise even further in 2017, our national Home Price Index is expected to slow to 4.7 percent year over year by November 2017.

z corelogic2.PNG

Anand Nallathambi, president and CEO of CoreLogic stated:

Home prices continue to march higher, with home prices in 27 states above their pre-crisis peak levels. Nationally, the CoreLogic Home Price Index remains 4 percent below its April 2006 peak, but should surpass that peak by the end of 2017.

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)

z existing3.PNG

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)

z existing5.PNG

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: http://www.philadelphiafed.org/research-and-data/publications/research-rap/2014/house-price-indexes.pdf

Steven Hansen

Source: CoreLogic



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