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Tuesday, October 06, 2020

CoreLogic: House Prices up 5.9% Year-over-year in August

by Calculated Risk on 10/06/2020 12:49:00 PM

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

From CoreLogic: Home Price Insights for August 2020

Home prices nationwide, including distressed sales, increased year over year by 5.9% in August 2020 compared with August 2019 and increased month over month by 1% in August 2020 compared with July 2020 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).
“The imbalance between homebuyer demand and for-sale inventory is particularly acute for lower-priced homes. Because of this imbalance, homes priced more than 25% below the median were up 8.6% in price over the last year, compared with the 5.9% price increase for all homes.” - Dr. Frank Nothaft, Chief Economist for CoreLogic

Despite the continued pressures of the pandemic, consumer home-purchasing power has stayed strong as mortgage rates remain at record lows. Meanwhile, for-sale inventory has continued to dwindle, dropping 17% year over year in August, which created upward pressure on home price appreciation as buyers compete for the limited supply of homes.

Home price growth is expected to slow as greater availability of new and existing homes are placed for sale in 2021 and elevated unemployment saps buyer demand. The HPI Forecast shows prices will start to downshift in early 2021, with annual U.S. HPI gains slowing to just 0.2% by August 2021 and many locations experiencing a decline in prices.
emphasis added
CR Note: The overall impact on house prices will depend on the duration of the crisis.