CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.3 % year-over-year year-over-year (reported up 0.8 % month-over-month). Last month’s 6.3% year-over-year gain was revised downward to 5.1%. There is considerable backward revision in this index which makes monthly reporting problematic. 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:

Nationally, home prices have been rising at a 5 to 6 percent annual rate for more than a year. However, local-market growth can vary substantially from that. Some metropolitan areas have had double-digit appreciation, such as Denver and Naples, Florida, while others have had price declines, like New Orleans and Rochester, New York.

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Anand Nallathambi, president and CEO of CoreLogic stated:

Higher property valuations appear to be driving up single-family construction as we head into the spring. Additional housing stock, especially in urban centers on the coasts such as San Francisco, could help to temper home price growth in the longer term. In the short and medium term, local markets with strong employment growth are likely to experience a continued rise in home sales and price growth well above the U.S. average.

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