November 2020 CoreLogic Home Prices: Annual U.S. Home Price Appreciation Jumped To 8.2%

CoreLogic's Home Price Index (HPI) home prices for October 2020 increased 8.2% in November 2020, compared with November 2019, marking the largest annual appreciation since March 2014. On a month-over-month basis, home prices increased by 1.1% compared to October 2020.

.... The demographic tailwind has arrived as Generation X and millennials drive housing demand ....

Analyst Opinion of CoreLogic's HPI

This is a rear view of home prices. There are several likely scenarios:

  • Home prices will deteriorate as the year progresses as the knock-on effect of the coronavirus will grow. The worst-case will be a decline to Great Recession levels but the most likely scenario is a 10% decline roughly equal to the expected unemployment rate. Too much money is being removed from the economy due to the COVID restrictions and elevated unemployment.
  • There will be a great relocation spurred by the continuation of working from home [why live in an expensive location if you can live anywhere in the world you want].
  • Some combination of above

Note the Forecast from CoreLogic on future home price growth:

The continued rise in home prices increases down payment requirements and exacerbates the housing market's affordability issues, leaving lower-income families in rentals and priced-out of the home-purchase market. Slowing buyer demand, coupled with more supply in the coming year, is reflected in the CoreLogic HPI Forecast, which shows annual home price growth slowing from 7.5% during the first quarter of 2021 to 2.5% by November 2021. However, possible stimulus actions could help spur home buyer demand among low- and middle-income families and support stronger home price 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.

Dr. Frank Nothaft, chief economist at CoreLogic stated:

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