CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 5.9 % year-over-year year-over-year (reported up 1.3 % month-over-month). Last month’s 6.2 % year-over-year gain was revised downward to 5.5 % [revisions to previous months lately have been slightly to significantly downward so I would not take the 5.9 % to the bank]. 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 for CoreLogic stated:
Housing remained an oasis of stability in May with home prices rising year over year between 5 percent and 6 percent for 22 consecutive months. The consistently solid growth in home prices has been driven by the highest resale activity in nine years and a still-tight housing inventory.
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Anand Nallathambi, president and CEO of CoreLogic stated:
Price appreciation continues to be fairly broad-based across the U.S. From a regional perspective, the Pacific Northwest continues to be the hottest area for home-price growth, with Oregon and Washington leading the way. The recent turbulence in financial markets should lead to modestly lower mortgage rates, which will provide even more support to the steadily improving real estate recovery.
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: http://www.philadelphiafed.org/research-and-data/publications/research-rap/2014/house-price-indexes.pdf
Source: CoreLogic
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