Tuesday, May 05, 2020

CoreLogic: House Prices up 4.5% Year-over-year in March

by Calculated Risk on 5/05/2020 08:55:00 AM

Notes: This CoreLogic House Price Index report is for March. The recent Case-Shiller index release was for February. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA).

From CoreLogic: CoreLogic Reports March Home Prices Increased by 4.5% Year Over Year

CoreLogic® ... oday released the CoreLogic Home Price Index (HPI™) and HPI Forecast™ for March 2020. Home prices increased nationally by 4.5% from March 2019. On a month-over-month basis, prices increased by 1.3% in March 2020. CoreLogic HPI Forecast indicates annual price growth of 0.5% from March 2020 to March 2021, with a month-over-month increase of 0.6% between March and April 2020.

Increased homes sales in January and February 2020 accounts for the sustained acceleration of home prices seen in the March HPI. CoreLogic continues to monitor shifts in the housing market and economy in light of COVID-19, and, in the coming weeks, homebuying activity will likely continue to be tempered by unemployment and recommended ongoing social distancing practices. We can expect to see home price growth slow drastically in response to this declining demand, with the HPI Forecast predicting less than 1% annual increase in home prices by March 2021.

Home prices for March reflect transactions negotiated primarily in the previous two months, prior to the implementation of the shelter-in-place policies. Rapid decline of purchase activity starting in the middle of March can be seen in other CoreLogic data and is consistent with our HPI forecast of slowing price growth in April,” said Dr. Frank Nothaft, chief economist at CoreLogic. “The first quarter GDP results showed that the country entered a recession in March. Unemployment claims have reached record highs and this economic environment will further impact the housing market into the foreseeable future.”
“The CoreLogic U.S. Home Price Index is predicted to remain largely unchanged over the next year or so after a long uninterrupted run of appreciation,” said Frank Martell, president and CEO of CoreLogic. “Although the economic fallout from lockdown orders, put in place to fight the spread of COVID-19, will be profound, the basic supports for a rebound in home purchase activity remain in place. Once the shelter-in-place policies are lifted, we expect millennials, who submitted home-purchase applications well into the crisis, to lead the way back to a positive, purchase-driven housing cycle.”
emphasis added
CoreLogic house pricesClick on graph for larger image in graph gallery.

This graph from CoreLogic shows the YoY change in the index - and the CoreLogic forecast.

CR Note: The impact of COVID-19 on house prices will probably not show up for several months. The report next month will be for April, and that is mostly for contracts signed in February and March. The overall impact on house prices will depend on the duration of the crisis.