FHFA: Home Prices Down Again in Second Quarter

The Federal Housing Finance Agency (FHFA)rnhas released its seasonally adjusted purchase-only house price index (HPI) forrnthe second quarter of 2011 and for the fourth consecutive quarter it reportsrnthat those prices declined nationwide.  rnThe HPI measures prices recorded for repeat home sales using Freddie Macrnor Fannie Mae mortgages.  During thernperiod which ended June 30 there was a deterioration of national home prices ofrn0.62 percent.  During June, the lastrnmonth in the current reporting period, however the HPI did rise 0.9rnpercent.  Over the last four reportingrnperiods the HPI has dropped 5.9 percent and, at the end of June was down 18.8rnpercent from the price peak reached in April 2007.  A second index, the all-transactions HPIrnwhich includes refinancing as well as purchases, decreased 1.9 percent in thernsecond quarter and is down 4.5 percent over the last year. </p

The four-quarter decline in home pricesrnover the last four quarters stands in contrast to the prices of other goods andrnservices which rose 4.5 percent during the same period resulting in anrninflation-adjusted change in the price of purchased homes of -10 percent in onernyear.</p

The seasonally adjusted purchase-onlyrnHPI declined from the first quarter to the second quarter in 31 states and,rnover the last year, only three states have recorded any home pricernappreciation, Oklahoma (+0.28 percent), North Dakota (+3.87 percent) and thernDistrict of Columbia (+12.23 percent.) rnThe largest price decrease over the last year was reported in Arizonarn(-14.91).  Idaho, Georgia, Nevada, andrnOregon all had one year negative price changes in the 13 to 14 percent range</p

Of the nine census divisions, the NewrnEngland and West South Central divisions experienced the strongest price gainsrnin the latest quarter, with both posting 0.7 percent price increases. Pricesrnwere weakest in the Mountain census division, where prices fell 2.3 percent.</p

The HPI tracks average housernprice changes in repeat sales or refinancing of the same single familyrnproperties.  The purchase only indexrncovers more than 6 million repeat sales transactions while the all-transactionrnindex covers 43 million repeat transactions.</p

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