CoreLogic’s Home Price Index Report (HPI) [1]reveals home prices nationally rose 3.6% annually in August are expected to rise 5.8% over the next year.
August’s HPI gain was down, though, from August 2018’s gain of 5.5% and was a slight increase of the prior month’s increase of 3.3%. CoreLogic states home prices have been increasing between 3.2% to 3.6% for the past six months, “indicating that the range of home price growth has plateaued.”
The lowest price housing tier saw home prices rise 5.5% year-over-year in August 2019, compared to 4.5% growth for the low-to middle-price tier and 3.9% for the middle-to moderate-price tier. Prices for higher priced homes rose 3.2%.
Overall, the HPI has increased annually every month since February 2012 and has gained 61.9% since hitting bottom in March 2011. According to CoreLogic, as of August 2019 the overall HPI was 9% higher than its pre-crisis peak in April 2006.
Idaho led the nation in appreciation for the eleventh-consecutive month, with annual appreciate of 11.6% in August. Connecticut was the only state with home price depreciation in August, falling 0.5% from last August.
Home prices in 41 states, including the District of Columbia, are higher than their normal pre-crisis peaks. California, Idaho, and Michigan surpassed their normal pre-crisis peak as of August 2019.
Connecticut’s home prices in August were the farthest below its all-time HPI high—16.3% below the July 2006 peak.
While home prices continue to rise, First American’s House Price Index [2] reported last month that consumer home-buying power increased 0.5% from the previous month.
The average household income increased 2.4% since last year and nearly 57% since January 2000.
Mark Fleming, Chief Economist at First American, said fall is the end of homebuying season and affordability saw improvements.
“The decline in mortgage rates alone increased house-buying power by $23,900 since March 2019. Over the same period, household income grew by 0.4%, boosting consumer house-buying power by $1,600,” Fleming said.
Overall, Fleming said, consumer house-buying power grew by $25,500 in July compared to March.