CoreLogic recently released its September 2019 Home Price Index (HPI). This HPI includes home price indices, home price forecasts and market condition indicators.
Based upon these three elements, CoreLogic predicts that home prices will rise +5.6% y/y from September 2019 through September 2020. On a month-to-month basis, CoreLogic predicts an increase of +0.3% from September 2019 to October 2019.
According to CoreLogic’s chief economist Dr. Frank Nothaft, “Mortgage rates were a full percentage point lower this September compared to one year ago, boosting affordability for first-time buyers and supporting a rise in homeownership. In addition to lower interest rates, personal income grew faster than home prices doing the past year. This (combination) has provided an additional lift for first-time buyer affordability and helped to boost the homeownership rate to the highest levels in more than five years.”
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Nothaft’s premise is reflected in buyers’ perceptions of housing affordability. CoreLogic found that one in five, 20%, of potential homebuyers see housing as affordable. Older Millennials (ages 30-38 years old) spent an average of $383,000 on their home purchase, a good 42% more than they anticipated spending.
Nationally, home prices increased +3.5% during September 2019 and no state posted an annual decline in home prices. That being said, CoreLogic pointed out that 38 states experienced a “cool down” in price increases with Nevada being having the most pronounced price cool down of all with a -9.1% slowdown from 12.6% annual price increase in September 2018 to a3.5% annual price increase in September 2019. States with the highest y/y home price increases were Idaho (+11.8%), Vermont (+8%) and Maine (+8%).
Home price increases by market tier looked like this:
- Lowest price tier – +5.3% y/y
- Low-mid tier – +4.6% y/y
- Mid-moderate tier – +3.9%
- High price tier – +3.1%
As with all price tiers combined, price appreciation has slowed by 1.1%-2.8% compared with September 2018 with the lowest price tier reflecting the largest price appreciation slowdown.
As of September 2019, the overall HPI is +9% higher than the pre-crisis peak in April 2006. However, when adjusted for inflation home prices increase 2.6% y/y in September 2019 and remained -11.2% below their peak numbers. Connecticut saw its home prices the farthest below its all time HPI at a negative -16.2% below its July 2006 pricing peak.
Thanks to Molly Boesel with CoreLogic for source data.