Home prices in January were down 5.7 percent from a year earlier after factoring the month's REO sales and short sales into the mix, according to new data from the research and analytics firm ""CoreLogic"":http://www.corelogic.com. January marked the sixth month in a row that the company has recorded a year-over-year decline in U.S. home prices.[IMAGE]
CoreLogic says the industry's ominous shadow inventory of distressed properties and rising negative equity, combined will still high levels of unemployment, all contributed to the continuing slide in home prices during the first month of this year.
The company reported earlier this week that 23 percent of the nation's mortgage borrowers owe more on their loan that the home is worth. Altogether, these underwater homeowners have negative equity of about $750 billion.[COLUMN_BREAK]
As of the end of last year, CoreLogic says 11.1 million properties were in a negative equity position and another 2.4 million had less than 5 percent equity in their homes, dangerously close to slipping underwater should home prices continue to fall.
Mark Fleming, chief economist with CoreLogic, said, ""A number of factors continue to dampen any recovery in the housing market. Negative equity, which limits the mobility of homeowners, weak demand, and the overhang of shadow inventory all continue to exert downward pressure on housing prices.""
Fleming is holding out for a strong seasonal uptick in purchase activity, though. ""We are looking out for renewed demand in the coming months as the spring buying season gets underway to hopefully reduce the downward pressure [on home prices],"" he said.
According to CoreLogic's study, the five states with the greatest home price depreciation in January were: Idaho (-15.7 percent), Alabama (-12.1 percent), Arizona (-11 percent), Oregon (-9.9 percent), and Utah (-9.8 percent).
The five states with the highest appreciation were: West Virginia (+5.5 percent), North Dakota (+3.3 percent), New York (+1.9 percent), Hawaii (+0.7 percent), and Wyoming (+0.2 percent).
Nationwide, CoreLogic says home prices have dropped 32.8 percent from their peak in April 2006, largely due to increased volumes of distressed properties on the market.