February Sees Large Deceleration in Home Price Gains

Home Price Index Highlights: February 2019

By Molly Boesel Housing Affordability, Real Estate

  • National home prices increased 4 percent year over year in February.
  • Home prices forecast to rise 4.7 percent from February 2019 to February 2020.
  • Annual changes by state varied from a 10.2 percent gain in Idaho to 1.7 percent decline in North Dakota.

National home prices increased 4 percent year over year in February 2019 and are forecast to increase 4.7 percent from February 2019 to February 2020, according to the latest CoreLogic Home Price Index (HPI®) Report. The February 2019 HPI gain was down from the February 2018 gain of 6.4 percent and it continued a slowdown in home price growth that began in May 2018.  

HPI by Price Segment

CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price[1]. The lowest price tier increased 5.6 percent year over year, compared with 4.9 percent for the low- to middle-price tier, 4.2 percent for the middle- to moderate-price tier, and 3.3 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. As with the overall HPI (all price tiers combined), the price tiers have seen a slowing in price appreciation ranging between 1.8 to 3.2 percentage points compared with a year ago.

HPI Price Declines

The overall HPI has increased on a year-over-year basis every month for seven years (since February 2012) and has gained 57.8 percent since hitting bottom in March 2011. As of February 2019, the overall HPI was 6 percent higher than its pre-crisis peak in April 2006. Adjusted for inflation, U.S. home prices increased 3.4 percent year over year in February 2019 and were 12.9 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, as well as the time in years since the first decrease in the indices.

Year Over Year HPI Growth

Figure 3 shows the year-over-year HPI growth in February 2019 for the 25 highest-appreciating states along with their highest and lowest historical price changes. Idaho stood out on the high side, with appreciation of 10.2 percent, and North Dakota on the low side with depreciation of 1.7 percent. Prices in 39 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 February 2019. Connecticut home prices in February 2019 were the farthest below their all-time HPI high, still 17.2 percent below the July 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-to-moderate 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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