CoreLogic (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released the CoreLogic Home Price Index (HPI„¢) and HPI Forecast„¢ for September 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 5.6 percent year over year from September 2017. On a month-over-month basis, prices increased by 0.4 percent in September 2018. (August 2018 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results each month.)
Looking ahead, the CoreLogic HPI Forecast indicates home prices will increase by 4.7 percent on a year-over-year basis from September 2018 to September 2019. On a month-over-month basis, home prices are expected to decrease by 0.6 percent from September to October 2018. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.
The erosion of affordability in the highest cost markets has begun to slow home price growth, said Dr. Frank Nothaft, chief economist for CoreLogic. Hawaii, California and Massachusetts had median sales prices above $400,000 this summer, the highest in the nation, while annual home price growth slowed steadily between June and September in these three states. When comparing September 2018 with September 2017, annual price appreciation slowed more in these states than in the U.S. overall. Nationally, annual price growth slowed 0.5 percentage points. However, in Hawaii, California and Massachusetts, growth rates decreased by 1.7, 0.7 and 1.0 percentage points, respectively.
According to the CoreLogic Market Condition Indicators (MCI), an analysis of housing values in the countrys 100 largest metropolitan areas based on housing stock, 38 percent of metropolitan areas have an overvalued housing market as of September 2018. 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). Additionally, as of September 2018, 19 percent of the top 100 metropolitan areas were undervalued, and 43 percent were at value.
When looking at only the top 50 markets based on housing stock, 46 percent were overvalued, 14 percent were undervalued, and 40 percent were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.
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In 2018, CoreLogic together with RTi Research of Norwalk, Connecticut, conducted an extensive consumer housing sentiment study, combining consumer and property insights. The study assessed attitudes toward homeownership and the drivers of the home buying or renting decision process. When asked about the desire to own a home, potential buyers in the younger millennial demographic have the desire to buy, 40 percent are extremely or very interested in homeownership. In fact, 64 percent say they regularly monitor home values in their local market. However, while 80 percent of younger millennials plan to move in the next four or five years, 73 percent cite affordability as a barrier to homeownership (far higher than any other age cohort).
Our consumer research indicates younger millennials want to purchase homes but the majority of them consider affordability a key obstacle, said Frank Martell, president and CEO of CoreLogic. Less than half of younger millennials who are currently renting feel confident they will qualify for a mortgage, especially in such a competitive environment.
The next CoreLogic Home Price Index press release, featuring October data, will be issued on December 4, 2018, at 8:00 a.m. ET.
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 priceas a function of real disposable income per capitawith 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, Core Based Statistical Area (CBSA) and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2 percent margin of error for the index.
About The 2018 CoreLogic Consumer Housing Sentiment Study
Nationwide survey of 3,001 renters and homeowners conducted in first quarter of 2018 by CoreLogic together with RTi Research. The survey has a sampling error of +/- 1.8 percent at the total respondent level with a 95 percent confidence level.
About RTi Research
RTi Research is an innovative, global market research and brand strategy consultancy headquartered in Norwalk, CT. Founded in 1979, RTi has been consistently recognized by the American Marketing Association as one of the top 50 U.S. insights companies. The company serves a broad base of leading firms in Financial Services, Consumer Goods, and Pharmaceuticals as well as partnering with leading academic centers of excellence.
The data provided are for use only by the primary recipient or the primary recipient’s publication or broadcast. This data may not be resold, republished or licensed to any other source, including publications and sources owned by the primary recipients parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data are illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact Alyson Austin at [email protected] or Allyse Sanchez at [email protected]. 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.
CoreLogic (NYSE: CLGX) 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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