March 2014 CoreLogic Home Prices Up 11.1% Year-over-Year, Rate of Growth Slowed

Econintersect: CoreLogic’s Home Price Index (HPI) shows that home prices in the USA in March 2014 are up 11.1% year-over-year (reported up 1.4% month-over-month). The year-over-year growth rate was down from the 12.2% reported last month.

This is the 25th consecutive month of year-over-year increase. Dr. Mark Fleming, chief economist for CoreLogic stated:

March data on new and existing home sales was weaker than expected and is a cause for concern as we enter the spring buying season. Interest rate-disenfranchised potential sellers are adding to the existing shadow inventory, while buyers who can’t find what they want to buy are on the sidelines creating a new kind of ‘shadow demand.’ This supply and demand imbalance continues to drive home prices higher, even though transaction volumes are lower than expected.

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Anand Nallathambi, president and CEO of CoreLogic stated:

Home prices continue to rise across the nation, but affordability, tight credit and supply concerns are becoming an increasing drag on purchase market activity. In many markets – especially major metro areas like Los Angeles, Atlanta and New York – home prices are being driven up at double-digit rates fueled by a lack of inventory and record levels of cash purchases.

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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 prices are improving – but the rate growth of year-over-year price improvement is now declining.

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

Source: CoreLogic