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Home Price Index Highlights: October 2017

Lower-Priced Homes Appreciated Fastest in October

Molly Boesel    |    Property Valuation

HPI Blog
  • National prices increased 7 percent year over year.
  • Home prices forecast to rise 4.2 percent over the next year.
  • Nevada, Utah, and Washington posted double-digit year-over-year price gains.

National home prices increased 7 percent year over year in October 2017, and are forecast to increase 4.2 percent from October 2017 to October 2018. Further, an analysis of the market by price tiers indicates that lower-priced homes experienced significantly higher gains, according to the latest CoreLogic Home Price Index (HPI®) Report.

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CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price[1]. The lowest price tier increased 9.5 percent year over year, compared with 8.5 percent for the low- to middle-price tier, 7.2 percent for the middle- to moderate-price tier, and 5.7 percent for the high-price tier.  Figure 1 shows the historical levels of the four price tiers indexed to January 2006, shortly before each of the tiers hit its peak index value.

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The low-price and low- to middle-price tiers are the only price tiers to pass their pre-housing-crisis peaks, by 18.2 percent and 0.7 percent, respectively. The middle- to moderate-price tier remains 0.2 percent below its peak, and the high-price tier remains 0.1 percent below its peak.

The overall HPI (all price tiers combined) has increased on a year-over-year basis every month since February 2012, and as of October 2017 prices were 0.9 percent higher than the pre-crisis peak set in April 2006. Adjusting for inflation, U.S. home prices increased 5.4 percent year over year in October 2017, and were 15.7 percent below their peak[2]. Figure 2 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 3 shows the year-over-year HPI growth in October 2017 for the 25 highest-appreciating states along with their highest and lowest historical price changes. The state of Washington showed the largest HPI gain of all states in October 2017 with a 12.5 percent year-over-year increase, followed by Utah and Nevada, each with a 10.1 percent gain. Prices in 37 states (including the District of Columbia) have risen above their pre-crisis peaks, and prices in two states are no more than 5 percent below their pre-crisis peaks. Of the seven states that had larger peak-to-trough declines than the national average, only California, Idaho, and Michigan have returned to the peak as of October 2017. Nevada home prices in October 2017 were the farthest below their all-time HPI high, still 23.8 percent below the March 2006 peak.

[1] 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-tomoderate price) and homes priced greater than 125 percent of the median (high price).

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

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