CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.7 % year-over-year year-over-year (reported up 2.1 % month-over-month). Last month’s 6.8 % year-over-year gain was revised downward to 5.9 % [revisions to previous months lately have been significantly downward so I would not take the 6.8 % 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 helped keep U.S. economic growth afloat in the first quarter of 2016 as residential investment recorded its strongest gain since the end of 2012. Low interest rates and increased home building suggest that housing will continue to be a growth driver.
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Anand Nallathambi, president and CEO of CoreLogic stated:
Home prices reached the bottom five years ago, and since then have appreciated almost 40 percent. The highest appreciation was in the West, where prices continue to increase at double-digit rates.
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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