CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 7.1 % 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. The quote of the day was in this data release:
…. an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate …
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 significantly downwardly revised in the following months. This months number will be reduced further in the coming months – and will end up near 6.0 % growth. 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.
Note that CoreLogic forecasts:
The CoreLogic HPI Forecast indicates that home prices will increase by 5.1 percent on a year-over-year basis from May 2018 to May 2019, and on a month-over-month basis home prices are expected to be up 0.3 percent from May 2018 to June 2018.
Dr. Frank Nothaft, chief economist for CoreLogic stated:
The lean supply of homes for sale is leading to higher sales prices and fewer days on market, and the supply shortage is more acute for entry-level homes. During the first quarter, we found that about 50 percent of all existing homeowners had a mortgage rate of 3.75 percent or less. May’s mortgage rates averaged a seven-year high of 4.6 percent, with an increasing number of homeowners keeping the low-rate loans they currently have, rather than sell and buy another home that would carry a higher interest rate.
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Frank Martell, president, and CEO of CoreLogic stated:
The CoreLogic consumer research demonstrates that, despite high home prices, renters want to get out of their rental property and purchase a home. Even in the most expensive markets, we found four times as many renters looking to buy than home-owners willing to sell. Until more supply becomes available, we will continue to see soaring pprices in cities such as Denver, San Francisco and Seattle.
