National Home Prices Increased 5.9 Percent Year Over Year in May
- Home prices including distressed sales increased 5.9 percent year over year in May 2016 and are forecast to increase by 5.4 percent over the next year.
- The highest appreciation was in the West, with Oregon and Washington growing by double-digits in May.
- Prices fell in one of the Texas oil markets in May: Midland logged a 4.1 percent year-over-year decrease.
National home prices increased 5.9 percent year over year in May 2016, according to the latest CoreLogic Home Price Index (HPI®) Report. While the HPI has increased on a year-over-year basis every month since February 2012, prices are still 7.2 percent below the April 2006 peak. Home prices have risen 39.8 percent since bottoming out in March 2011. Home prices are expected to increase by 5.4 percent from May 2016 to May 2017, and are projected to return to the April 2006 peak in mid-2017. Adjusting for inflation, U.S. home prices increased 5.9 percent year over year in May 2016, and are 20.5 percent below their peak.
Figure 1 shows the year-over-year HPI growth for the 25 highest-appreciating states in May 2016 along with their highest and lowest historical price changes. Oregon showed the largest HPI gain of all states in May 2016 with an 11 percent year-over-year increase, followed closely by Washington (+10.1 percent) and Colorado (+9.4 percent). Three states had a year-over-year decrease in home prices: Connecticut (-0.9 percent), New Jersey (-0.2 percent), and Pennsylvania (-0.1 percent). Nevada home prices were the farthest below their all-time HPI high, still 32.7 percent below the March 2006 peak.
Figure 2 shows the year-over-year HPI change in select oil-patch areas for May 2016 compared with May 2015. While state-level prices continued to increase, prices fell 4.1 percent year over year in Midland, Texas, in May 2016. Midland has the highest concentration of oil employment of all metropolitan areas in the U.S.
1 The Consumer Price Index (CPI) Less Shelter was used to create the inflation-adjusted HPI.