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:

The demographic tailwind has arrived as Generation X and millennials drive housing demand," said Dr. Frank Nothaft, chief economist at CoreLogic. "Lower-priced home values increased about one and a half times faster than higher-priced home values in November, as first-time buyers tend to seek out homes within the lower price ranges.

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

Frank Martell, president and CEO of CoreLogic stated:

The housing market performed remarkably well in 2020 despite the volatile economic state. While we can expect to see lingering effects of COVID-19 resurgences and subsequent shutdowns in the early months of 2021, vaccine distributions and stimulus actions should revitalize economic activity and keep home purchase demand and home price growth strong.

Despite the rapid acceleration of national home price growth, local markets continue to vary. For instance, in Phoenix, where there is a severe shortage of for-sale homes, prices continued to surge, increasing 12.6% year over year in November. Meanwhile, the New York-Jersey City-White Plains metro recorded a smaller-than-average annual increase of 3.2%, as residents continue to seek out more space in less densely populated areas. At the state level, Idaho, Maine, and Indiana experienced the strongest price growth in November, up 15.7%, 15.4%, and 13.6%, respectively.

The HPI Forecast also reveals the disparity in-home price growth across metros. In markets like Houston, which was hit hard by the collapse of the oil industry and the recent hurricane season, home prices are expected to decline 1.4% by November 2021. Conversely, in San Diego, home prices are forecasted to increase 8.3% over the next 12 months as low inventory continues to increase prices.

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that metros such as Miami; Lake Charles, Louisiana and Prescott, Arizona, are at the greatest risk (above 70%) of a decline in home prices over the next 12 months, while Brownsville-Harlingen, Texas, and Gulfport-Biloxi-Pascagoula, Mississippi, are at moderate risk (50%-70%) of a decrease.

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 here.

From CoreLogic:

The CoreLogic HPI™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the "Single-Family Combined" tier representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indexes are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers—"Single-Family Combined" (both attached and detached) and "Single-Family Combined Excluding Distressed Sales." As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, CBSA and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.

Source: CoreLogic