Written by Steven Hansen
CoreLogic’s Home Price Index (HPI) home prices recorded an 11.3% annual gain, the highest since March 2006.
…. As consumer confidence rebounds and the job market picks back up, the 2021 spring homebuying season is on track to outpace trends seen in 2019 and 2018. Millennials lead the homebuying charge with older millennials seeking move-up purchases and younger millennials entering peak homebuying years. As we look towards the second half of the year, further erosion of affordability may dampen purchase demand as prospective buyers continue to compete for the severely limited supply of for-sale homes. A pick-up in construction and an increase in for-sale listings as more people get vaccinated may help moderate surging home price growth ….
Analyst Opinion of CoreLogic’s HPI
Home prices are continuing very strong exasperated by low inventory.
According to CoreLogic:
…. revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.
Dr. Frank Nothaft, chief economist at CoreLogic stated:
Lower-priced homes are in big demand and short supply, driving up prices faster compared to their more expensive counterparts. First-time buyers seeking a starter home priced 25% or more below the local-area median saw prices jump 15.1% during the past year, compared with the overall 11.3% gain in our national index.
HPI Case-Shiller Trends – Year-over-Year Growth
z corelogic2.PNG
Frank Martell, president and CEO of CoreLogic stated:
Despite the severe slowdown last year, the 2021 spring homebuying season is trending strong — reflecting the many positive signs of economic recovery. With prospective buyers continuing to be motivated by historically low mortgage rates, we anticipate sustained demand in the summer and early fall.
z corelogic5.PNG
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 that 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
From CoreLogic:
The CoreLogic HPI™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.
CoreLogic HPI Forecasts™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers—”Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, CBSA and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.
Source: CoreLogic
include(“/home/aleta/public_html/files/ad_openx.htm”); ?>
