• Home prices forecast to rise 4.7 percent over the next year.
• Prices in 27 states have risen above the pre-crisis peaks.
• Adjusting for inflation, home prices are still 19.3 percent below their peak.
National home prices increased 7% year over year in February 2017, according to the latest Home Price Index (HPI) Report. While the HPI has increased on a year-over-year basis every month since February 2012, prices are still 3.8% below the April 2006 peak. Home prices have risen 44.5% since bottoming out in March 2011, and are expected to increase by 4.7% from February 2017 to February 2018. Prices are projected to return to the April 2006 peak in late 2017. Adjusting for inflation, U.S. home prices increased 4.4% year-over-year in February 2017, and were 19.3% below their peak.
Washington showed the largest HPI gain of all states in February 2017 with a 11.1% year-over-year increase, followed closely by Oregon (+10%). Prices in 27 states (including the District of Columbia) have risen above their pre-crisis peaks, and prices in seven states are within 5% of their pre-crisis peaks. Nevada home prices were the farthest below their all-time HPI high in February 2017, still 30.7% below the March 2006 peak.
While analyzing four individual home-price tiers that were calculated relative to the median national home price and indexed to January 2006, the low-price tier has shown the most price growth in recent months, increasing 10.3% year over year in February 2017. This price tier also recovered 63.6% from its lowest point in March 2011 and is the only price tier to pass (by 10.4%) its pre-housing-crisis peak. The low-to-middle tier has recovered 53% from its lowest point in March 2011, and has risen 8.5% year over year and is now 5.2% below its peak. The middle-to-moderate tier increased 7.4% year over year in February 2017, but remains 5.1% below its peak. The high-price tier, which fell the least during the housing crisis, increased by 5.7% year over year in February 2017, the slowest increase of all the price tiers. The high-price tier remains 3.9% below its peak.