June 2017 CoreLogic Home Prices Year-Over-Year Growth Rate Now 6.7%

CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.7 % year-over-year (reported up 1.1 % month-over-month). CoreLogic HPI is used in the Federal Reserves’ Flow of Funds to calculate the values of residential real estate.

Analyst Opinion of CoreLogic’s HPI

CoreLogic year-over-year rate of growth has been steady for three years – with a higher number issued initially and later downwardly revised in the following months.

Dr Frank Nothaft, chief economist for CoreLogic stated:

The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory. As of Q2 2017, the unsold inventory as a share of all households is 1.9 percent, which is the lowest Q2 reading in over 30 years.

 

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Frank Martell, president, and CEO of CoreLogic stated:

Home prices are marching ever higher, up almost 50 percent since the trough in March 2011. With no end to the escalation in sight, affordability is rapidly deteriorating nationally and especially in some key markets such as Denver, Houston, Miami and Washington. While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge.

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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