May 2012 CoreLogic Home Price Index: Third Month of Gains

Econintersect: CoreLogic’s Home Price Index (HPI) shows that home prices in the U.S. increased in May 2012 2.0% year-over-year following last month’s upwardly revised 1.7% increase. This is the third consecutive month of year-over-year increase. The National Association of Realtors 3 month rolling average also ticked up strongly in May.

CoreLogic stated:

“The recent upward trend in U.S. home prices is an encouraging signal that we may be seeing a bottoming of the housing down cycle,” said Anand Nallathambi, president and chief executive officer of CoreLogic. “Tighter inventory is contributing to broad, but modest, price gains nationwide and more significant gains in the harder-hit markets, like Phoenix.”

“Home price appreciation in the lower-priced segment of the market is rebounding more quickly than in the upper end,” said Mark Fleming, chief economist for CoreLogic. “Home prices below 75 percent of the national median increased 5.7 percent from a year ago, compared to only a 1.8 percent increase for prices 125 percent or more of the median.”

Excluding distressed sales, home prices nationwide increased on a year-over-year basis by 2.7 percent in May 2012 compared to May 2011. On a month-over-month basis excluding distressed sales, the CoreLogic HPI indicates home prices increased 2.3 percent in May 2012 compared to April 2012, the fourth month-over-month increase in a row. Distressed sales include short sales and real estate owned (REO) transactions.

Comparison of Home Price Indices – Case-Shiller 3 Month Average (blue line, left axis), CoreLogic (yellow 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. Here almost universally – home prices are either improving or becoming less bad – with the National Association of Realtors home prices currently showing the largest price gains.

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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Steven Hansen

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Source: CoreLogic