The CoreLogic Home Price Insights report features an interactive view of our Home Price Index product with analysis through April 2020 with forecasts from May 2020 and April 2021.
CoreLogic HPI™ is designed to provide an early indication of home price trends. The indexes are fully revised with each release and employ techniques to signal turning points sooner. CoreLogic HPI Forecasts™ (with a 30-year forecast horizon), project CoreLogic HPI levels for two tiers—Single-Family Combined (both Attached and Detached) and Single-Family Combined excluding distressed sales.
The report is published monthly with coverage at the national, state and Core Based Statistical Area (CBSA)/Metro level and includes home price indices (including distressed sale); home price forecast and market condition indicators. The data incorporates more than 40 years of repeat-sales transactions for analyzing home price trends.
HPI National Change
April 2020 National Home Prices
Home prices nationwide, including distressed sales, increased year over year by 5.4% in April 2020 compared with April 2019 and increased month over month by 1.4% in April 2020 compared with March 2020 (revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results).
Forecast Prices Nationally
The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.3% from April 2020 to May 2020, and decline 1.3% on a year-over-year basic from April 2020 to April 2021. 2021 will mark the first year home prices are expected to decline in more than nine years
“The very low inventory of homes for sale, coupled with homebuyers’ spur of record-low mortgage rates, will likely continue to support home price growth during the spring. If unemployment remains elevated in early 2021, then we can expect home prices to soften. Our forecast has home prices down in 12 months across 41 states.”
– Dr. Frank Nothaft
Chief Economist for CoreLogic
HPI & Case-Shiller Trends
This graph shows a comparison of the national year-over-year percent change for the CoreLogic HPI and CoreLogic Case-Shiller Index from 2000 to present month with forecasts one year into the future. We note that both the CoreLogic HPI Single Family Combined tier and the CoreLogic Case-Shiller Index are posting positive, but moderating year-over-year percent changes, and forecasting gains for the next year.
COVID-19 Impact on
Home Prices
The home price acceleration in the April HPI was supported by increased homes sales in the first quarter of the year. Home price growth is expected to decelerate somewhat in May, with the CoreLogic HPI Forecast calling for a month-over-month increase of 0.3% compared with April 2020. Looking ahead, the CoreLogic HPI Forecast predicts an annual price decline of 1.3% from April 2020 to April 2021. In 2021, home prices are expected to decline for the first time in more than nine years.
Home-purchase activity slowed over March and April compared to last year as shelter-in-place orders, and an unprecedented spike in unemployment, dented home-buying activity fueled by millennials. Nationally, the for-sale inventory of entry-level homes plummeted on average 25% in April. Should this trend continue, we may see an adverse effect on home sales in the near term.
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“Tight supply and pent-up demand, particularly among millennials, provides optimism for a bounce-back in the housing market purchase activity and home prices over the medium term. The next 12 to 18 months are going to be very tough times for the broader economy. As employment and economic activity begin to pick up, as it will surely do, we expect housing to be a driver in a national recovery.”
-Frank Martell
President and CEO of CoreLogic
HPI National and State Maps – April 2020
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.
Nationally, the year-over-year home price changed by 5.4%. No states posted an annual decline in home prices in April 2020.
The states with the highest increases year-over-year were Idaho (12%, Arizona (8.3%), Indiana (8%) and Missouri (8%).
HPI Top 10 Metros Change
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.
These large cities continue to experience price increases, with Washington D.C. leading the way at 5.7% year over year.
Markets to Watch: Top Markets at Risk of Home Price Decline
The Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts a very high probability (above 60%) of a decline in home prices in Prescott, Arizona; Huntington, West Virginia; Cape Coral-Fort Myers, Florida and College Station-Bryan, Texas, over the next 12 months. It also predicts a moderate probability of a price decline (40-60%) in North Port-Sarasota-Bradenton, Florida. Huntington, West Virginia, was hit particularly hard by the recent downturn in the oil and gas industry. Typical vacation spots, like Cape Coral-Fort Myers and North Port-Sarasota-Bradenton in Florida, as well as Prescott, Arizona, are also expected to experience a decline in home property value as visitors stay home and vacation rentals are sold.
Market Conditions Indicators (MCI) Metro Area Maps – April 2020
The first map displayed is the HPI by CBSA for April 2020.
According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the country’s 50 largest metropolitan areas based on housing stock, 40% of metropolitan areas had an overvalued housing market in April 2020, while 18% were undervalued and 42% were at value. The MCI analysis categorizes home prices in individual markets as undervalued, at value or overvalued by comparing home prices to their long-run, sustainable levels, which are supported by local market fundamentals such as disposable income. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10% higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10% below the sustainable level.
Summary
CoreLogic HPI features deep, broad coverage, including non-disclosure state data. The index is built from industry-leading real-estate public record, servicing, and securities databases—including more than 40 years of repeat-sales transaction data—and all undergo strict pre-boarding assessment and normalization processes.
CoreLogic HPI and HPI Forecasts both provide multi-tier market evaluations based on price, time between sales, property type, loan type (conforming vs. non-conforming) and distressed sales, helping clients hone in on price movements in specific market segments.
Updated monthly, the index is the fastest home-price valuation information in the industry—complete home-price index datasets five weeks after month’s end. The Index is completely refreshed each month—all pricing history from 1976 to the current month—to provide the most up-to-date, accurate indication of home-price movements available.
Methodology
The CoreLogic HPI™ is built on industry-leading public record, servicing and securities real-estate databases and incorporates more than 40 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%.
Source: CoreLogic
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For questions, analysis or interpretation of the data, contact Allyse Sanchez at corelogic@ink-co.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. The data are compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.
About CoreLogic
CoreLogic (NYSE: CLGX), the leading provider of property insights and solutions, promotes a healthy housing market and thriving communities. Through its enhanced property data solutions, services and technologies, CoreLogic enables real estate professionals, financial institutions, insurance carriers, government agencies and other housing market participants to help millions of people find, acquire and protect their homes. For more information, please visit www.corelogic.com.
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