House prices fell in 21 states during the third quarter, leading to the first quarterly decline in average U.S. home prices in 13 years, according to a government index that excludes transactions involving homes with mortgages above the $417,000 conforming loan limit.
Prices were still up 1.8 percent from the same quarter a year ago, as third-quarter price declines did not entirely erase previous gains. But it was the lowest one-year increase since 1995, OFHEO said in releasing the latest numbers.
Another index released Tuesday, the Standard & Poor’s/Case-Shiller U.S. National Home Price Index, estimated that average home prices nationwide fell 1.7 percent during the third quarter and were down 4.5 percent from the previous year.
The indexes differ in part because OFHEO uses data provided by Fannie Mae and Freddie Mac, which includes only mortgages within the $417,000 conforming loan limit. OFHEO’s quarterly House Price Index tracks repeat sales and refinance transactions involving homes with conforming mortgages, relying on appraisal data for refinancings.
The S&P/Case-Shiller indexes uses information on repeat sales, but not refinancings, which are obtained from county assessor and recorder offices. The Case-Shiller index includes sales of more expensive homes, which are “value-weighted” so that price trends for those homes have a greater influence on estimated price changes.
The 10 states experiencing the sharpest third-quarter price declines in OFHEO’s House Price Index were Michigan (-2.5 percent), Florida (-2.1 percent), California (-1.8 percent), Massachusetts (-1.7 percent), New Hampshire (-1.5 percent), Rhode Island (-1.4 percent), Minnesota (-1.1 percent), Arizona (-1 percent), Ohio (-0.9 percent) and New York (-0.8 percent).
With the exception of New York, prices in those states were also down for the year. All told, 10 states — nine of the states that saw the greatest third-quarter price drops, plus Nevada — experienced annual price declines, the largest number since 1996-97, OFHEO said.
The 10 states that experienced annual price declines were Michigan (-3.7 percent), California (-3.6 percent), Nevada (-2.4 percent), Massachusetts (-2.3 percent), Rhode Island (-2.2 percent), Florida (-2.1 percent), New Hampshire (-0.4 percent), Arizona (-0.2 percent), Minnesota (-0.06 percent) and Ohio (-0.06 percent).
“While select markets still maintain robust rates of appreciation, our newest data show price weakening in a very significant portion of the country,” said OFHEO Director James Lockhart in a press release announcing the release of the latest numbers.
The 10 states with the greatest third-quarter price appreciation tended to be Western states with rural populations: Wyoming (2.8 percent), Utah (2.1 percent), Oklahoma (2.1 percent), South Dakota (1.7 percent), Montana (1.6 percent), Idaho (1.6 percent), North Dakota (1.5 percent), New Mexico (1.4 percent), Mississippi (1.3 percent) and West Virginia (1.2 percent).
Homes with conforming mortgages in Washington, D.C., also enjoyed third-quarter price appreciation of 1.6 percent, and were up 5.2 percent for the year.
Most of the 287 metropolitan statistical areas (MSAs) ranked by OFHEO could claim gains in average home price in the previous 12 months, with only 83 MSAs experiencing annual price declines.
But 70 MSAs that registered annual gains saw prices slip in the third quarter, including El Paso, Texas. With average prices up nearly 8 percent for the year, El Paso made OFHEO’s list of the top 20 MSAs with the highest rates of annual appreciation. But prices slipped an almost imperceptible 0.1 percent during the third quarter.
Other MSAs where prices were up for the last 12 months but fell during the third quarter included Akron, Ohio (-1.2 percent); Anchorage, Alaska (-0.3 percent); Anderson, Ind. (-2.3 percent); Anderson, S.C. (-1.6 percent); Atlanta, Ga. (-0.6 percent); Bellingham, Wash. (-0.6 percent); Chicago, Ill. (-0.1 percent); Cincinnati, Ohio (-0.4 percent); Colorado Springs, Colo. (-0.6 percent), Columbus, Ohio (-0.8 percent); Evansville, Ind. (-0.8 percent); Fort Wayne, Ind. (-0.4 percent); Green Bay, Wis. (-1.1 percent); Jacksonville, Fla. (-1.1 percent); Joplin, Mo. (-1.8 percent); Kansas City, Mo. (-0.4 percent); Kennewick, Wash. (-1.9 percent); Lakeland, Fla. (-0.6 percent); Longview, Wash. (-1.5 percent); Lubbock, Texas (-1.3 percent); Lynchburg, Va. (-0.6 percent); Miami, Fla. (-0.8 percent); Milwaukee, Wis. (-0.3 percent); Mobile, Ala. (-0.7 percent); Myrtle Beach, S.C. (-2.0 percent); Ocala, Fla. (-1.1 percent); Omaha, Neb. (-0.8 percent); Orlando, Fla. (-1.8 percent); Prescott, Ariz. (-2.2 percent); Racine, Wis. (-1.2 percent); Pueblo, Colo. (-1.8 percent); Roanoke, Va. (-0.3 percent); Salem, Ore. (-0.3 percent); Sioux City, Iowa (-0.9 percent); South Bend, Ind. (-1.7 percent); Springfield, Ohio (-2.1 percent); Syracuse, N.Y. (-2.1 percent), Tallahassee, Fla. (-1.4 percent); Tucson, Ariz. (-1 percent); and Wilmington, N.C. (-1.6 percent).
Seventeen of the 20 cities having the most depreciation were in Florida and California, with the remaining three in Michigan. In California, 24 of 26 cities ranked by OFHEO experienced annual price declines, including 13 MSAs where prices declined by 5 percent or more.
Top 20 declining markets
Source: Office of Federal Housing Enterprise Oversight