Home-price declines slowed in August
Real estate brief
By Inman News, Thursday, October 23, 2008.National home-price declines slowed slightly in August, according to an index tracking homes bought using mortgages purchased or guaranteed by Fannie Mae and Freddie Mac.
U.S. home prices fell 0.6 percent on a seasonally adjusted basis from July to August, compared with a 0.8 percent decline in July, according to the Federal Housing Finance Agency's monthly House Price Index.
The index tends to understate home-price appreciation and declines because it excludes mortgages too large or too risky for Fannie and Freddie to buy for their own portfolios or bundle into securities sold to investors.
The FHFA monthly index showed a 5.9 percent decline in home prices since August, 2007, and a 6.5 percent drop since an April 2007 peak. Monthly price changes in nine Census divisions ranged from a 1.8 percent decline in the Pacific Division to 0.4 percent appreciation in the New England Division.
Working with numbers from Case-Shiller, analysts at Fitch Ratings say national home prices have fallen by 22 percent since peaking in 2006, and are expected to decline another 10 percent in the next 18 months (see story).
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Submitted by John Allen on October 24, 2008 - 6:01am.
That IS a problem; "working with numbers from Case-Shiller". In my area home prices have fallen little and in some cases have risen while condos have seen a larger drop. Case-Shiller numbers are fed to buyers like gospel when only 20 metro areas are in the survey. Of course the media loves it as it plays into getting obama elected. If that happens we will see numbers even worse.
Submitted by Matt Carter on October 24, 2008 - 1:45pm.
John, Case-Shiller has monthly 10- and 20-city indexes, and a quarterly report that looks at all nine U.S. Census regions. When we examined the differences in the Case-Shiller, FHFA (formerly OFHEO) and NAR home price indexes in June, we tried to move beyond casting aspersions on peoples' (supposed) motives and instead focus on the different methodologies employed. Your point about local markets is well taken (and is discussed in the piece linked to above).