Econintersect: CoreLogic’s Home Price Index (HPI) shows that home prices in the USA in April 2014 are up 8.8% year-over-year (reported up 1.4% month-over-month). The year-over-year growth rate was down from the 10.5% reported last month.
This is the 27th consecutive month of year-over-year increase. Mark Fleming, chief economist for CoreLogic stated:
May’s 8.8 percent year-over-year growth rate is down almost three percentage points from just three months ago. The influences of modestly rising inventory and less-than-expected demand are causing price growth to moderate toward our forecasted expectations.
Anand Nallathambi, president and CEO of CoreLogic stated:
Home prices are continuing to climb across most of the country which has both positive and negative implications for the housing market. While the rapid rise in prices over the past two years has lifted many homeowners out of negative equity, it has also become a negative factor in buying decisions for prospective purchasers weighing affordability concerns. As we move ahead, a moderation in home price increases over the next twelve months should help cool things down a bit and keep the housing recovery going.
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)
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)