Home prices show further decline in fourth quarter.
National home prices declined during the fourth quarter of 2008, according to two separate reports by Freddie Mac and the Federal Housing Finance Agency (FHFA).
Freddie Mac's Conventional Mortgage Home Price Index (CMHPI) purchase-only series registered a 17.9 percent annualized decline in U.S. house prices during the fourth quarter of 2008, following a downward-revised 8 percent annualized drop in the third quarter.
Over the four quarters ending with the fourth quarter of 2008, home-sales prices fell an average of 9.5 percent in the CMHPI purchase-only series--the largest annual decrease in its 39-year history, according to Freddie Mac Chief Economist Frank Nothaft.
"The deepening recession and the large inventory of for-sale homes continued to push home values down," said Nothaft. "While historically low interest rates on long-term fixed-rate mortgages [FRMs] help the housing market, demand for homes was weakened by rising unemployment, wealth declines from declining stock-market valuations and general lack of consumer confidence."
For the second consecutive quarter in the CMHPI purchase-only series, every region of the nation experienced flat or declining home values over the quarter. But the fourth quarter of 2008 marks the first time that year-over-year declines in home values were recorded in each of the nine regions of the country, said Nothaft.
"The range of experience was wide, though, with the West South Central area experiencing declines of one-tenth of 1 percent over the year while the Pacific region had a decline of 23 percent," Nothaft added.
Meanwhile, U.S. home prices posted record declines in the fourth quarter of 2008, according to the Federal Housing Finance Agency's House Price Index (HPI).
The FHFA seasonally adjusted purchase-only HPI--based on data from home sales--was 3.4 percent lower on a seasonally adjusted basis in the fourth quarter than in the third quarter. This decline was greater than the 2 percent decline in the third quarter, and the largest in the purchase-only index's 18-year history.
Over the past year, seasonally adjusted prices fell 8.2 percent from the fourth quarter of 2007 to the fourth quarter of 2008, according to FHFA Director James B. Lockhart.
"Price declines continued in the fourth quarter, although not as rapidly as some had expected," said Lockhart. "We are hopeful the housing initiatives announced last week by President Obama will begin to provide much-needed stability to the housing markets."
FHFA's all-transactions House Price Index, which includes data from home sales and appraisals for refinancings, showed significantly less weakness over the latest quarter than the purchase-only index. The all-transactions HPI fell 0.2 percent in the fourth quarter of 2008.
It was down 4.5 percent over the four-quarter period--the largest four-quarter drop in the index, which extends back to 1975. These data reflect trends as of Dec. 31, 2008, according to FHFA.
While the national purchase-only house price index fell 8.2 percent between the fourth quarters of 2007 and 2008, prices of other goods and services rose 1.4 percent. Accordingly, the inflation-adjusted price of homes fell approximately 9.6 percent over the latest year, said FHFA.
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|Title Annotation:||Book Briefing|
|Comment:||Home prices show further decline in fourth quarter.(Book Briefing)|
|Date:||Apr 1, 2009|
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