• Western States Led the Nation in Home Price Growth
• Prices in Washington and Utah Experienced Double-Digit Annual Increases
• Over One-Third of U.S. Top Cities Are Overvalued in Terms of Current Housing Stock

IRVINE, Calif. — (BUSINESS WIRE) — September 5, 2017 — CoreLogic^® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI^™) and HPI Forecast^™ for July 2017, which shows home prices are up strongly both year over year and month over month. Home prices nationally increased year over year by 6.7 percent from July 2016 to July 2017, and on a month-over-month basis, home prices increased by 0.9 percent in July 2017 compared with June 2017,* according to the CoreLogic HPI.

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CoreLogic: Home Price Change and Market Conditions for Select Metropolitan Areas, July 2017 (Graphic: Business Wire)

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 5 percent on a year-over-year basis from July 2017 to July 2018, and on a month-over-month basis home prices are expected to increase by 0.4 percent from July 2017 to August 2017. The CoreLogic HPI Forecast is a projection of home prices 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.

“In July, home price growth in the Pacific Northwest and mountain states led the nation with the highest appreciation rates,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”

In an analysis of the country’s 100 largest metropolitan areas, based on housing stock, 34 percent of cities have an overvalued housing stock as of July 2017, according to CoreLogic Market Conditions Indicators (MCI) data. 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. Also as of July, 28 percent of the top 100 cities were undervalued, and 38 percent were at value. When looking at only the top 50 markets, based on housing stock, 46 percent were overvalued, 16 percent were undervalued and 8 percent were at value. The MCI defines an overvalued housing market as one in which home prices are at least 10 percent higher than the long-term, sustainable level, while an undervalued housing market is one in which home prices are at least 10 percent below the sustainable level.

“Home prices in July continued to rise at a solid pace with no signs of slowing down,” said Frank Martell, president and CEO of CoreLogic. “The combination of steadily rising purchase demand along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of this year. While mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued.”

*June 2017 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.

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 indexes 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, Core Based Statistical Area (CBSA) and ZIP Code levels. The forecast accuracy represents a 95-percent statistical confidence interval with a +/- 2.0 percent margin of error for the index.