CoreLogic’s Selma Hepp explains why home prices are climbing

In today’s HousingWire Daily interview, Selma Hepp, CoreLogic’s deputy chief economist, discusses findings in the latest S&P CoreLogic Case Shiller home price index, which indicates the nation’s home prices are climbing.

During the interview, Hepp also explains what an uptick in mortgage delinquencies means for the overall health of the housing market.

Here is a small preview of the interview with Hepp. The transcript below has been lightly edited for length and clarity.

HW: Let’s start out with the latest S&P CoreLogic Case Shiller home price index. Are you concerned at all as you see the home-price growth over the last several months?

Selma Hepp: That’s an excellent question, and I’m going to start by saying no, I’m not. And there’s a reason for that. So obviously, this time around, the price growth we’re seeing is very much different than what we saw prior to the Great Recession. Housing fundamentals are much different, and the way we are going about our home purchase and refinance market is much different. The reason we’re seeing home price growth accelerate so much is because of the low inventory we had coming into this current pandemic. In fact, even prior to the pandemic we had low supply. So, we would probably still be in this situation.

On the other hand, if you look at the last two decades of new home construction, and the overall number of housing units in the market, we added only 20 million units but welcomed 46 million people. So, in a 40-year period, there has been a huge imbalance in the number of people in the housing market versus housing units. The low inventory amid this strong demand was a natural occurrence for home prices, as they were going to grow this fast at this point in time.

The Housing News podcast explores the most important topics happening in mortgage, real estate, and fintech. Each week a new mortgage or real estate executive joins the show to add perspective to the top stories crossing HousingWire’s news desk. Hosted by Sarah Wheeler and produced by Alcynna Lloyd.