Home Price Growth Stabilized in June After Easing for a Year

Home Price Index Highlights: June 2019

By Molly Boesel Housing Affordability, Real Estate

  • National home prices increased 3.4% year over year in June.
  • Three states showed annual declines in home prices in June.
  • The nation’s first-half 2019 home price increase was 2.9%, the slowest first half of any year since 2011.

National home prices increased 3.4% year over year in June 2019 and are forecast to increase 5.2% from June 2019 to June 2020, according to the latest CoreLogic Home Price Index (HPI®) Report. The June 2019 HPI gain was down from the June 2018 gain of 6.1%, and the same as the May 2019 gain, indicating that the rate of home price increases has flattened out. For the first half of 2019 (the six-month appreciation rate through June) home prices increased 2.9%, which was the slowest first half of any year since 2011, when prices increased by 0.8%.

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 5.5% year over year in June 2019, compared with 4.5% for the low- to middle-price tier, 3.8% for the middle- to moderate-price tier, and 2.8% 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 2.2 to 3.4 percentage points compared with a year ago, with the lowest price tier showing the largest slowdown.

HPI Price Declines From Peak

The overall HPI has increased on a year-over-year basis every month for seven years (since February 2012) and has gained 61.4% since hitting bottom in March 2011. As of June 2019, the overall HPI was 8.5% higher than its pre-crisis peak in April 2006. Adjusted for inflation, U.S. home prices increased 2.7% year over year in June 2019 and were 11.4% 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 For 25 Highest-Appreciating States

Figure 3 shows the year-over-year HPI growth in June 2019 for the 25 highest-appreciating states along with their highest and lowest historical price changes. Idaho led the states in appreciation as it has for nine consecutive months, with annual appreciation of 9.9% this June. South Dakota saw home price depreciation of 4.7% and was one of only three states showing a decrease in prices (Connecticut posted a 0.4% decline and Delaware dipped 0.2%). Prices in 40 states (including the District of Columbia) have risen above their nominal 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 nominal pre-crisis peaks as of June 2019. Connecticut home prices in June 2019 were the farthest below their all-time HPI high, still 17% below the July 2006 peak.  While annual price increases slowed in 41 states compared with a year earlier, the cooling was most pronounced in South Dakota, Washington state, California and Nevada.

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