Home Price Growth Hits Eight Consecutive Years in January

Home Price Index Highlights: January 2020

By Molly Boesel Housing Affordability, Real Estate

  • National home prices increased 4% year over year in January.
  • Home prices are forecast to rise 5.4% from January 2020 to January 2021.
  • Connecticut was the only state to post an annual decline in home prices.

National home prices increased 4% year over year in January 2020 and are forecast to increase 5.4% from January 2020 to January 2021, according to the latest CoreLogic Home Price Index (HPI®) Report. The January 2020 HPI gain was down from the January 2019 gain of 4.2% and was up from the December 2019 gain of 3.8%. 

Figure 1: HPI Price Declines From Peak

The HPI has increased on a year-over-year basis every month since February 2012, and January marked the eighth year of increasing home prices. The HPI has gained 63% since hitting bottom in March 2011. As of January 2020, the overall HPI was 9.6% higher than its pre-crisis peak in April 2006, just before the start of the housing crisis. Adjusted for inflation, U.S. home prices increased 1.9% year over year in January 2020 and were 11.6% 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, as well as the time in years since the first decrease in the indices.

Figure 2: Price Growth Strongest For Lowest-Priced Homes

CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price[2]. The lowest price tier increased 5.7% year over year in January 2020, compared with 5.1% for the low- to middle-price tier, 4.3% for the middle- to moderate-price tier, and 3.7% for the high-price tier. Cumulative price gains since the 2011 trough were strongest for lower-priced homes, with the lowest price tier gaining 97%, the low- to middle-price tier gaining 77.6%, the middle- to moderate-price tier gaining 65.5% and the high-price tier gaining 49%. Figure 2 shows the change from a year ago and from the 2011 trough for each HPI price tier.

Figure 3: States With the Highest and Lowest Year-Over-Year Change in HPI

Figure 3 shows the year-over-year HPI growth in January 2020 for the 5 highest- and lowest-appreciating states. Idaho led the states in appreciation as it has since late 2018, with annual appreciation of 10.5% this January, far above any of the other leading states. At the low end, Connecticut was the only state to see falling home prices with a 0.1% decrease from January 2019. Prices in 41 states (including the District of Columbia) have risen above their nominal pre-crisis peaks. Connecticut home prices in January 2020 were the farthest below their all-time HPI high, still 17.5% below the July 2006 peak.  While annual price increases slowed in 25 states compared with a year earlier, the cooling was most pronounced in Nevada. Prices in Nevada increased by 3.3% year over year in January 2020, a 6.7 percentage point slowdown from the 10% annual increase in January 2019.

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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% 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).