December 2020 CoreLogic Home Prices: Annual US Home Price Appreciation In 2020 Outpaced 2019 Levels By 50%

CoreLogic's Home Price Index (HPI) home prices for December 2020 exceeded expectations in 2020, closing out the year with the highest annual home price gain since February 2014 in December at 9.2%. CoreLogic said:

.... Two record lows are fueling home price gains: for-sale inventory and mortgage rates ....

Analyst Opinion of CoreLogic's HPI

Price growth exceeded my forecast for the year - home prices are continuing very strong.

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:

Two record lows are fueling home price gains: for-sale inventory and mortgage rates. Prospective sellers with flexible timetables have opted to delay listing their home until the pandemic fades or they are vaccinated. We can expect more inventory to come available in the second half of the year, leading to slowing in price growth toward year-end.

HPI Case-Shiller Trends - Year-over-Year Growth

z corelogic2.PNG

Frank Martell, president, and CEO of CoreLogic stated:

At the start of the pandemic, many braced for a Great Recession-era collapse of the housing market. However, market conditions leading into the crisis — namely low home supply, desire for more space and millennial demand — amplified the rapid acceleration of home prices

Affordability concerns continue to persist as prices continue to steeply rise. For instance, in San Diego, prices increased 10.4% year over year in December 2020 compared to the 3% gain in December 2019. San Diego home prices are also forecasted to increase an additional 8.2% over the next 12 months.

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

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