March 2021 CoreLogic Home Prices: Millennials Propel Home Buying

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

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.

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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