CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 5.7 % year-over-year year-over-year (reported up 1.1 % month-over-month). Last month’s 5.9 % year-over-year gain was revised downward to 5.3 % [revisions to previous months lately have been slightly to significantly downward so I would not take the 5.7 % 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:
Mortgage rates dipped in June to their lowest level in more than three years, supporting home purchases. Local markets with strong economic growth have generally had stronger home-price growth. Among large metropolitan areas, Denver had the lowest unemployment rate and the strongest home-price appreciation.
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Anand Nallathambi, president and CEO of CoreLogic stated:
Home prices continue to increase across the country, especially in the lower price ranges and in a number of metro areas. We see prices continuing to increase at a healthy rate over the next year by as much as 5 percent.
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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