Home Prices Showed Modest Increases For the Spring Season

CoreLogic analyzes four individual home-price tiers that are calculated relative to the median national home sale price[1]. The lowest price tier increased 5.4% year over year, compared with 4.5% for the low- to middle-price tier, 4% for the middle- to moderate-price tier, and 3% for the high-price tier. Figure 1 shows the historical levels of the four price tiers indexed to January 2006, shortly before each of the tiers hit its peak index value. As with the overall HPI (all price tiers combined), the price tiers have seen a slowing in price appreciation ranging between 2.3 to 3.7 percentage points compared with a year ago, with the lowest price tier showing the largest slowdown.

HPI Price Declines From Peak

The overall HPI has increased on a year-over-year basis every month for seven years (since March 2012) and has gained 61.1% since hitting bottom in March 2011. As of May 2019, the overall HPI was 8.3% higher than its pre-crisis peak in April 2006. Adjusted for inflation, U.S. home prices increased 2.6% year over year in May 2019 and were 11.6% below their peak[2]. Figure 2 shows the cumulative price movement since the inception of price declines for both the nominal HPI and the inflation-adjusted HPI, as well as the time in years since the first decrease in the indices.

Year Over Year HPI Growth

Figure 3 shows the year-over-year HPI growth in May 2019 for the 25 highest-appreciating states along with their highest and lowest historical price changes. Idaho led the states in appreciation as it has for eight consecutive months, with annual appreciation of 10.7% this May. North Dakota saw home price depreciation of 1.7%, making this the eleventh month of annual HPI decreases for this state. Prices in 39 states (including the District of Columbia) have risen above their 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 pre-crisis peaks as of May 2019. Connecticut home prices in May 2019 were the farthest below their all-time HPI high, still 17.6% below the July 2006 peak. While annual price increases slowed in 34 states compared with a year earlier, the cooling was most pronounced in Washington state, California, and Nevada.

[1] The four price tiers are based on the median sale price and are as follows: homes priced at 75% or less of the median (low price), homes priced between 75% and 100% of the median (low-to-middle price), homes priced between 100% and 125% of the median (middle-to-moderate price) and homes priced greater than 125% of the median (high price).

[2] The Consumer Price Index (CPI) Less Shelter was used to create the inflation-adjusted HPI.