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 November 2019, which shows home prices rose
both year over year and month over month. Home prices increased
nationally by 3.7% from November 2018. On a month-over-month basis,
prices increased by 0.5% in November 2019. (October
2019 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.)
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CoreLogic Home Price Change & MCI by Select Metro Area; Nov. 2019 (Graphic: Business Wire)
Home prices continue to increase on an annual basis with the CoreLogic
HPI Forecast indicating annual price growth will be 5.3% from November
2019 to November 2020. On a month-over-month basis, the forecast calls
for home prices to increase by 0.2% from November 2019 to December 2019,
which would mark a new peak in prices since the last U.S. recorded peak
in April 2006. 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 latest U.S. index shows that the slowdown in home prices we saw in
early 2019 ended by late summer,” said Dr. Frank Nothaft, chief
economist at CoreLogic. “Growth in the U.S. index quickened in November
and posted the largest 12-month gain since February. The decline in
mortgage rates, down more than one percentage point for fixed-rate loans
from November 2018, has supported a rise in sales activity and home
prices.”
According to the CoreLogic Market Condition Indicators (MCI), an
analysis of housing values in the country’s 100 largest metropolitan
areas based on housing stock, 34% of metropolitan areas have an
overvalued housing market as of November 2019. 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. As of November 2019, 27% of the top 100 metropolitan
areas were undervalued, and 39% were at value.
When looking at only the top 50 markets based on housing stock, 40% were
overvalued, 20% were undervalued and 40% were at value in November 2019.
The MCI analysis defines an overvalued housing market as one in which
home prices are at least 10% above the long-term, sustainable level. An
undervalued housing market is one in which home prices are at least 10%
below the sustainable level.
During the second quarter of 2019, CoreLogic, together with RTi Research
of Norwalk, Connecticut, conducted an extensive survey measuring
consumer-housing sentiment among millennials. The study showed that a
significant number of older millennials (ages 30-38) are strongly
considering moving within the next 12 months, with 64% of this cohort
expecting to purchase a home, reinforcing this group’s interest in the
housing market. Meanwhile, 57% of younger millennials (ages 21-29) plan
on renting their next home. Despite the purchase intent among older
millennials, nearly half (43%) still view homeownership as unaffordable
and out of reach.
“We’re continuing to see a split among older and younger millennials
when it comes to their plans to purchase a home,” said Frank Martell,
president and CEO of CoreLogic. “While older millennials are looking
forward to participating in the housing market in the future, their
younger counterparts don’t see themselves buying a home anytime soon.
With home prices expected to rise just over 5% over the next 12 months,
affordability remains a concern for most prospective buyers.”
The next CoreLogic HPI press release, featuring December 2019 data, will
be issued on Tuesday, February 4, 2020, at 8:00 a.m. ET.
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 the CoreLogic Consumer Housing Sentiment Study
In the second quarter of 2019, 877 renters and homeowners were surveyed
by CoreLogic together with RTi Research. This study is a quarterly pulse
of U.S. housing market dynamics. Each quarter, the research focuses on a
different issue related to current housing topics. This first quarterly
study concentrated on consumer sentiment within high-priced markets. The
survey has a sampling error of +/- 3.1% at the total respondent level
with a 95% 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.
Source: CoreLogic
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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.
CORELOGIC, the CoreLogic logo, CoreLogic HPI and CoreLogic HPI
Forecast are trademarks of CoreLogic, Inc. and/or its subsidiaries. All
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