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Home Prices Grow Slowly in July

Home prices increased by 3.6% year-over-year in July 2019 and are forecast to increase 5.4% from July 2019 to July 2020. The latest CoreLogic [1] Home Price Index (HPI) report states that the HPI in July 2019 gain was down year-over-year 5.8%, and up a bit from the June 2019 gain of 3.3%.  

“Home prices have been increasing in a narrow range of 3.3% to 3.9% over the past six months, indicating that the rate of home price increases has flattened out,” said Molly Boesel, Principal, Economist, Office of the Chief Economist at CoreLogic.

The HPI increased in all four price tiers analyzed by CoreLogic, growth has been slot. The price tiers have seen a slowing in price appreciation ranging between 1.7 to 3.3 percentage points compared with a year earlier, with the lowest price tier showing the largest slowdown. The lowest price tier increased 5.5% year over year in July 2019, compared with 4.7% for the low- to middle-price tier, 4% for the middle- to moderate-price tier, and 3.1% for the high-price tier.

CoreLogic notes that the HPI has increased on a year-over-year basis every month for seven years, and as of July 2019, the overall HPI was 8.8% higher than its pre-crisis peak in April 2006. Adjusted for inflation, U.S. home prices increased 2.5% year over year in July 2019 and were 11.5% below their peak.

“Idaho led the states in appreciation as it has for ten consecutive months, with annual appreciation of 11.5% this July,” Boesel said. “South Dakota saw home price depreciation of 3.4% and was one of only two states showing a decrease in prices (Connecticut posted a 0.3% decline). Prices in 39 states (including the District of Columbia) have risen above their nominal pre-crisis peaks. Of the seven states that had larger peak-to-trough declines than the national average, California, Idaho, and Michigan have surpassed their nominal pre-crisis peaks as of July 2019. Connecticut home prices in July 2019 were the farthest below their all-time HPI high, still 16.4% below the July 2006 peak.  While annual price increases slowed in 39 states compared with a year earlier, the cooling was most pronounced in California, Nevada, South Dakota and Washington state.”