Record-High Repeat: U.S. Annual Home Price Growth Reaches a New All-Time High in August, CoreLogic Reports

• The 12-month rise in U.S. Home Price Index reached a record-setting 18.1% in August, the highest in the 45-year history of the index
• Western U.S. regions continue to lead the way in price growth

IRVINE, Calif., October 5, 2021—CoreLogic, a leading global property information, analytics and data-enabled solutions provider, today released the CoreLogic Home Price Index (HPI^™) and HPI Forecast^™ for August 2021.

Home prices rose to a fever pitch this summer, with annual price gains reaching another all-time high in August at 18.1%. Ongoing affordability challenges within the supply-constricted market have also been exacerbated by an influx in homebuying activity from investors. As the home purchase market continues to boom and buoy the post-pandemic economy, these market factors are unevenly affecting access for some buyers. This is reflected in a recent CoreLogic consumer survey, where 59% of consumers looking to purchase a home reported combined household earnings of at least six figures, compared to the 10% of consumers looking to purchase earning less than $50,000.

“Home prices continue to escalate at a torrid pace as a broad spectrum of buyers drive demand for a limited supply of homes,” said Frank Martell, president and CEO of CoreLogic. “We expect to see the trend of strong price gains continue indefinitely with large amounts of capital chasing too few assets.”

Top Takeaways:

• Nationally, home prices increased 18.1% in August 2021, compared to August 2020. This is the largest 12-month growth in the U.S. index since the series began (January 1976 – January 1977). On a month-over-month basis, home prices increased by 1.3% compared to July 2021.
• In August, appreciation of detached properties (19.8%) was again the highest measured since the inception of the index and 7.8-percentage points higher than that of attached properties (12%).
• Home price gains are projected to slow to a 2.2% increase by August 2022, as ongoing affordability challenges deter some potential buyers.
• In August, home prices rose sharply in the Pacific Northwest with Bend, Oregon, experiencing the highest year-over-year increase at 37.2%. Twin Falls, Idaho, ranked second with a year-over-year increase of 35.8%.
• At the state level, Idaho and Arizona again led the way with the strongest price growth at 32.2% and 29.5%, respectively.

“Single-family detached homes continue to be in high demand,” said Dr. Frank Nothaft, chief economist at CoreLogic. “These properties offer more living space and distance from neighboring homes than that of attached properties. On average, detached homes have 28% more inside space compared to single-family attached properties and about twice as much space as apartments in multifamily structures.”

The next CoreLogic HPI press release, featuring September 2021 data, will be issued on November 9, 2021, at 8:00 a.m. ET.

Methodology

The CoreLogic HPI^™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 45 years of repeat-sales transactions for analyzing home price trends. Generally released on the first Tuesday of each month with an average five-week lag, the CoreLogic HPI is designed to provide an early indication of home price trends by market segment and for the “Single-Family Combined” tier, representing the most comprehensive set of properties, including all sales for single-family attached and single-family detached properties. The indices are fully revised with each release and employ techniques to signal turning points sooner. The CoreLogic HPI provides measures for multiple market segments, referred to as tiers, based on property type, price, time between sales, loan type (conforming vs. non-conforming) and distressed sales. Broad national coverage is available from the national level down to ZIP Code, including non-disclosure states.

CoreLogic HPI Forecasts^™ are based on a two-stage, error-correction econometric model that combines the equilibrium home price—as a function of real disposable income per capita—with short-run fluctuations caused by market momentum, mean-reversion, and exogenous economic shocks like changes in the unemployment rate. With a 30-year forecast horizon, CoreLogic HPI Forecasts project CoreLogic HPI levels for two tiers — “Single-Family Combined” (both attached and detached) and “Single-Family Combined Excluding Distressed Sales.” As a companion to the CoreLogic HPI Forecasts, Stress-Testing Scenarios align with Comprehensive Capital Analysis and Review (CCAR) national scenarios to project five years of home prices under baseline, adverse and severely adverse scenarios at state, metropolitan areas and ZIP Code levels. The forecast accuracy represents a 95% statistical confidence interval with a +/- 2% margin of error for the index.

About Market Risk Indicator

Market Risk Indicators are a subscription-based analytics solution that provide monthly updates on the overall “health” of housing markets across the country. CoreLogic data scientists combine world-class analytics with detailed economic and housing data to help determine the likelihood of a housing bubble burst in 392 major metros and all 50 states. Market Risk Indicators is a multi-phase regression model that provides a probability score (from 1 to 100) on the likelihood of two scenarios per metro: a >10% price reduction and a ≤ 10% price reduction. The higher the score, the higher the risk of a price reduction.  

About the Market Condition Indicators

As part of the CoreLogic HPI and HPI Forecasts offerings, Market Condition Indicators are available for all metropolitan areas and identify individual markets as “overvalued”, “at value”, or “undervalued.” These indicators are derived from the long-term fundamental values, which are a function of real disposable income per capita. Markets are labeled as overvalued if the current home price indexes exceed their long-term values by greater than 10%, and undervalued where the long-term values exceed the index levels by greater than 10%.

About the CoreLogic Consumer Housing Sentiment Study      

3,000+ consumers were surveyed by CoreLogic via Qualtrics. The study is an annual pulse of U.S. housing market dynamics concentrated on consumers looking to purchase a home, consumers not looking to purchase a home, and current mortgage holder. The survey was conducted in April 2021 and hosted on Qualtrics.

The survey has a sampling error of ~3% at the total respondent level with a 95% confidence level.

Source: CoreLogic

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About CoreLogic

CoreLogic is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com.

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