By Karl Smith
Here is the thing. The upward surge at the end of the graph below -- the one headed upward faster than in the mid-2000s -- is not a measure of increasing home price growth. It's a measure of increasing home price acceleration:
The technical -- yes, technical -- term here is jerk. The third time derivative. Making matters worse -- or better or more thrilling, depending on your disposition -- CoreLogic's Home Price Index is a three-month average and we are looking at year-over-year trends. Both averaging and year-over-year comparisons tend to smooth out jerk relative to month-to-month annualized rates.
As always, the forces here are self-reinforcing, and there is no clear mechanism to slowdown the feedback loop, save the raw granularity of the housing market. Houses, being distinct physical objects, take some time to inspect, title, deed, etc. -- even if the buyer is purchasing sight unseen.
If this continues, we might have to start calculating housing's snap.