CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 6.6 % year-over-year (reported up 0.5 % month-over-month). CoreLogic HPI is used in the Federal Reserves’ Flow of Funds to calculate the values of residential real estate.

Analyst Opinion of CoreLogic’s HPI

CoreLogic year-over-year rate of growth has been steady for three years – with a higher number issued initially and later significantly downwardly revised in the following months. Last month it was 6.6 % year-over-year – which was revised down to 6.2 %. This likely will be reduced further in the coming months – and will end up near 6 % growth.

Dr Frank Nothaft, chief economist for CoreLogic stated:

Entry-level homes have been in particularly short supply, leading to more rapid home-price growth compared with more expensive homes. Homes with a purchase price less than 75 percent of the local area median had price growth of 9.0 % during the year ending Janrary 2018. Homes that sold for more than 125 % of median appreciated 5.3 % over the same 12 month period. Thus, first-time buyers are facing acute affordability challenges in some high-cost areas.

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Frank Martell, president and CEO of CoreLogic stated:

A rise in mortgage rates coupled with home-price growth further erodes affordability. CoreLogic has idenified nearly one-half of the 50 largest metropolitan areas as overvalued. Millennials who are looking to become first-time home owners find it particularly challenging to find an affordable home in these areas. Our projections continue to show tightness in the entry level market for the foreseeable future, which could further prevent millennials from purchasing homes in 2018 and 2019., even as much of that generation reaches its prime home-buying years.

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)