Freddie Mac announced yesterday its Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series registered a 5.3 percent annualized decline in U.S. house prices during the first quarter of 2009, following a downward revised 18.5 percent annualized drop in the fourth quarter. Over the year ending with the first quarter of 2009, U.S. home sales prices fell 8.4 percent in the CMHPI Purchase-Only Series – less than the 9.7 percent annual decline recorded between the fourth quarter of 2007 and the fourth quarter of 2008.
“The improvement in house-price change from a steep decline to a more moderate one is consistent with other housing market data that point to the highest level of home-purchase affordability in at least 40 years and a stabilization in existing home sales and single-family construction in the first quarter, albeit at low levels of activity,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This pattern was consistent across all nine regions of the U.S., with the rate of depreciation lessening in seven regions, and switching to modest appreciation in New England and the East North Central states.
“Local markets that currently experience high levels of vacant-for-sale homes will continue to experience declines in prices over the coming year. This will likely cause some further decline in the CMHPI Purchase-Only series for the U.S. over several more quarters. Nonetheless, it is important to realize that some local markets will experience stable or modestly rising prices even though the national metric may decline.”
The CMHPI Purchase-Only Series excludes all refinancings in its calculation. Freddie Mac also produces a CMHPI Classic Series that includes data from both home purchase transactions and mortgage refinancings, with the latter values based on appraisals. Generally, because appraisals are backwards looking through the use of recent comparable property transactions, the Classic Series will typically lag changes in the Purchase-Only series. The CMHPI Classic Series indicated that over the year ending with the first quarter, home values depreciated 4.0 percent in the U.S. measure, less than the 5.3 percent decline over the year ending in the fourth quarter of 2008.
South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): fell 0.3 percent (–1.3 percent, annualized) in the first quarter of 2008. Over the last 12 months, home values decreased 9.6 percent, and during the last five years, home values increased 13.1 percent.
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