Home / News / Market Studies / Report: Decline in Home Values Accelerates in Q3
Print This Post Print This Post

Report: Decline in Home Values Accelerates in Q3

""Freddie Mac"":http://www.freddiemac.com announced today that its Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series registered a 7.3 percent annualized decline in U.S. house prices during the third quarter of 2008. The mortgage financing giant said that home values declined in every region of the country, led by substantial losses in the Pacific states.
The rate of price decline has grown significantly compared to the second quarter, when Freddie Mac reported a 0.9 percent annualized drop in home prices. Over the four quarters ending with the third quarter of 2008, home sales prices fell an average of 7.2 percent in the CMHPI Purchase-Only Series - the largest annual fall in values over the 39-year history of the series.
""The disruptions in the credit markets during the latter part of the third quarter have likely weakened housing demand and contributed to further declines in house prices,"" said Frank Nothaft, Freddie Mac VP and chief economist. ""With the unemployment rate having risen to 6.5 percent in October, there will likely be further weakening in housing demand, which could push the market bottom in home sales and housing starts out at least until middle to late next year and result in further declines in house prices. Our November forecast has the CMHPI purchase-only index declining 4.3 percent over the course of 2009.
""For the first time in the CMHPI series we saw every region of the nation experience declining home values over the quarter,"" Nothaft continued. ""There is significant variation in the degree of the declines, ranging from a very small 0.1 percent annualized drop in values in the West South Central region to a 20 percent annualized loss in home values in Pacific states. Some areas have been fortunate not to feel the full sting of the credit crunch or the foreclosure storm, but unfortunately they are no longer immune from the effects of falling home values,"" Nothaft said.
%{=FONT-STYLE: italic}Freddie Mac's CMHPI (Purchase-Only) Series shows the following regional performances:%
- West South Central Division (AR, LA, OK, TX): dipped 0.03 percent (-0.1 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values increased 0.5 percent, and during the last five years, home values increased 25.9 percent.
- Middle Atlantic Division (NJ, NY, PA): decreased 0.1 percent (-0.3 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 2.2 percent, and during the last five years, home values increased 33.4 percent.
- West North Central Division (IA, KS, MN, MO, ND, NE, SD): decreased 0.5 percent (-1.8 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 2.6 percent; over the last five years, home values increased 12.7 percent.
- East South Central Division (AL, KY, MS, TN): fell 1.1 percent (-4.2 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 1.3 percent, and during the last five years, home values increased 23.6 percent.
- New England Division (CT, MA, ME, NH, RI, VT): dropped 1.1 percent (-4.2 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 5.1 percent, and during the last five years, home values increased 13.9 percent.
- East North Central Division (IL, IN, MI, OH, WI): decreased 1.2 percent (-4.6 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 3.9 percent, and during the last five years, home values increased 5.7 percent.
- South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): fell 2.1 percent (-8.1 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 6.8 percent, and during the last five years, home values increased 27.6 percent.
- Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): declined 2.3 percent (-8.9 percent, annualized) in the third quarter of 2008. In the last 12 months, home values decreased 7.6 percent; during the last five years, home values increased 33.1 percent.
- Pacific Division (AK, CA, HI, OR, WA): decreased 5.4 percent (-19.9 percent, annualized) in the third quarter of 2008. Over the last 12 months, home values decreased 20.2 percent, and during the last five years, home values have increased 18.0 percent.
The CMHPI Purchase-Only Series excludes refinancings. Unlike other home price indexes based on mean or median values of homes sold during a given period, the CMHPI is constructed, using regression techniques, from observations of actual sales prices or appraised values of the same homes over time. For additional information on Freddie Mac's Home Price Index, ""
click here"":http://www.freddiemac.com/finance/cmhpi.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
x

Check Also

Top Markets for Home-Flipping Investors

Picking the right market is key to flipping homes, and a new report examined where the highest percentages of home sales are for flipping or renting out.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.