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Home Price Index Highlights: February 2017

National Home Prices Increased 7 Percent Year Over Year in February 2017

Molly Boesel    |    Property Valuation

HPI Price Declines From Peak
  • Home prices forecast to rise 4.7 percent over the next year.
  • Prices in 27 states have risen above the pre-crisis peaks.
  • Adjusting for inflation, home prices are still 19.3 percent below their peak.

National home prices increased 7 percent year over year in February 2017, according to the latest CoreLogic Home Price Index (HPI®) Report. While the HPI has increased on a year-over-year basis every month since February 2012, prices are still 3.8 percent below the April 2006 peak. Home prices have risen 44.5 percent since bottoming out in March 2011, and are expected to increase by 4.7 percent from February 2017 to February 2018. Prices are projected to return to the April 2006 peak in late 2017. Adjusting for inflation, U.S. home prices increased 4.4 percent year over year in February 2017, and were 19.3 percent below their peak[1]. Figure 1 shows the cumulative price movement since the inception of price declines for both the nominal HPI and the inflation-adjusted HPI and the time in years since the first decrease in the indices.

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Figure 2 shows the year-over-year HPI growth for the 25 highest-appreciating states in February 2017 along with their highest and lowest historical price changes. Washington showed the largest HPI gain of all states in February 2017 with a 11.1 percent year-over-year increase, followed closely by Oregon (+10 percent). Prices in 27 states (including the District of Columbia) have risen above their pre-crisis peaks, and prices in seven states are within 5 percent of their pre-crisis peaks. Nevada home prices were the farthest below their all-time HPI high in February 2017, still 30.7 percent below the March 2006 peak.  

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CoreLogic also analyzes four individual home-price tiers that are calculated relative to the median national home price[2]. Figure 3 shows the levels of the four price tiers indexed to January 2006, shortly before each of the tiers hit its peak index value. The low-price tier has shown the most price growth in recent months, increasing 10.3 percent year over year in February 2017. This price tier also recovered 63.6 percent from its lowest point in March 2011 and is the only price tier to pass (by 10.4 percent) its pre-housing-crisis peak. The low-to-middle tier has recovered 53 percent from its lowest point in March 2011, and has risen 8.5 percent year over year and is now 5.2 percent below its peak. The middle- to moderate-price tier increased 7.4 percent year over year in February 2017, but remains 5.1 percent below its peak. The high-price tier, which fell the least during the housing crisis, increased by 5.7 percent year over year in February 2017, the slowest increase of all the price tiers. The high-price tier remains 3.9 percent below its peak.

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1 The Consumer Price Index (CPI) Less Shelter was used to create the inflation-adjusted HPI.

2 The four price tiers are based on the median sale price and are as follows: homes priced at 75 percent or less of the median (low price), homes priced between 75 and 100 percent of the median (low-to-middle price), homes priced between 100 and 125 percent of the median (middle-to-moderate price) and homes priced greater than 125 percent of the median (high price).

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