National home prices increased 5.6 percent year over year in September 2018 and are forecast to increase 4.7 percent from September 2018 to September 2019. The September HPI gain was the slowest year-over-year gain since January 2017. 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.
CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price. The lowest price tier increased 8.5 percent year over year, compared with 6.8 percent for the low- to middle-price tier, 6.1 percent for the middle- to moderate-price tier, and 4.5 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. Appreciation in the low-price tier began pulling ahead of the other price tiers in 2013, and appreciation in the low-price tier has been steady since then. The five-year appreciation rate (from September 2013 to September 2018) for the low-price tier was 47 percent, compared with a five-year appreciation of 37 percent for the low- to middle-price tier, 32 percent for the middle- to moderate-price tier, and 24 percent for the high-price tier.
The overall HPI (all price tiers combined) has increased on a year-over-year basis every month since February 2012 and has gained 57.5 percent since hitting bottom in March 2011. As of September 2018, the overall HPI was 5.5 percent higher than its pre-crisis peak in April 2006. Adjusting for inflation, U.S. home prices increased 3.8 percent year over year in September 2018 and were 13.3 percent below their peak. Figure 2 shows the cumulative price movement since the inception of price declines for both the nominal HPI and the inflation-adjusted HPI, as well as the time in years since the first decrease in the indices.
Figure 3 shows the year-over-year HPI growth in September 2018 for the 25 highest-appreciating states along with their highest and lowest historical price changes. Two states showed double-digit year-over-year increases: Nevada, up 12.8 percent, and Idaho, up 12 percent. Prices in 38 states (including the District of Columbia) have risen above their pre-crisis peaks. Of the seven states that had larger peak-to-trough declines than the national average, California, Idaho, and Michigan have surpassed their pre-crisis peaks as of September 2018. Connecticut home prices in September 2018 were the farthest below their all-time HPI high, still 16.4 percent below the July 2006 peak.
 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).
 The Consumer Price Index (CPI) Less Shelter was used to create the inflation-adjusted HPI.
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