August 2016 CoreLogic Home Prices Year-over-Year Growth Rate Now Improved to 6.2%

CoreLogic's Home Price Index (HPI) shows that home prices in the USA are up 6.2 % year-over-year year-over-year (reported up 1.1 % month-over-month). Last month's 6.0 % year-over-year gain was revised downward to 5.4 %. 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:

Home prices are now just 6 percent below the nominal peak reached in April 2006. With prices forecasted to increase by 5 percent over the next year, prices will be back to their peak level in 2017.

 

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Anand Nallathambi, president and CEO of CoreLogic stated:

Housing values continue to rise briskly on stronger fundamental and investor-fueled demand, as well as lack of adequate supply. This continued price appreciation is contributing to a growing affordability crisis in many markets around the country.

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.