CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.8 % year-over-year year-over-year (reported up 1.0 % month-over-month). There is considerable backward revision in this index which makes monthly reporting problematic. 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:
Many markets experienced a low inventory of homes offered for sale and strong byyer demand, sustaining upward pressure on home prices. These conditions are likely to persist as we enter 2016. During the year ending October 2016, we expect the CoreLogic national Home Price index appreciation to slow to 5.2 percent.
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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 – and the rate of growth is now marginally improving after almost a year of declining growth rate.
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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