CoreLogic's Home Price Index (HPI) shows that home prices in the USA are up 6.8 % year-over-year year-over-year (reported up 1.1 % month-over-month). Last month's 6.9% year-over-year gain was revised downward to 6.2% [revisions to previous months lately have been significantly downward so I would not take the 6.9% to the bank yet]. CoreLogic HPI is used in the Federal Reserves's Flow of Funds to calculate the values of residential real estate.

Dr Frank Nothaft, chief economist for CoreLogic stated:

Fixed-rate mortgage rates dropped more than one-quarter of a percentage point in the first three months of 2016, and job creation averaged 209,000 over the same period. These economic forces will sustain home purchases during the spring and support the 5.2 percent home price appreciation CoreLogic has projected for the next year.

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Anand Nallathambi, president and CEO of CoreLogic stated:

Home prices continue to rise across the U.S. with every state posting year-over-year gains during the last 12 months. Improved economic conditions and tight inventories continue to drive exceptionally strong gains in many markets, especially for homes priced below $500,000.

Comparison of Home Price Indices – Case-Shiller 3 Month Average (blue line, left axis), CoreLogic (green line, left axis) and National Association of Realtors (red line, right axis)

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The way to understand the dynamics of home prices is to watch the direction of the rate of change – and not necessarily whether the prices are getting better or worse. Home price rate of growth is now marginally improving.

Year-over-Year Price Change Home Price Indices – Case-Shiller 3 Month Average (blue bar), CoreLogic (yellow bar) and National Association of Realtors (red bar)

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Caveats Relating to Home Price Indices

There is no such thing as an “accurate” home price index. CoreLogic HPI is a repeat sales type index which should not be skewed by changes in the mix of home sales. For more information, please read here.