Home Price Declines Accelerate

According to today's OFHEO Q1 report, U.S. house price declines accelerated 1.7% vs Q4 and 3.1% from a year earlier.

OFHEO's Home Price Index measures changes of values for properties using selling prices and appraisals based on conforming mortgage data from FNMA & FHLMC.

That excludes non conforming jumbo loans, for more than $729,750 in high-cost areas, and most low, no down, interest only and subprime mortgages.

Prices for previously owned single-family homes fell in 43 states, with values in California and Nevada tumbling more than 8%.

Of the 20 ranked cities with the greatest price declines over the latest four quarters, all but one (Las Vegas-Paradise, Nevada) were in California or Florida.

OFHEO Director James B. Lockhart: "For homeowners and financial market observers,

these declines spell further erosion in home equity levels and potentially more trouble for mortgage markets
."

Paul Kasriel, chief economist at Northern Trust:

"It's a dismal picture, there's no way around it. A complicating factor is the fact that so many homeowners owe more on their mortgages than their houses are worth.

This is a financial crisis. You can't put lipstick on this pig
."

The Nattering One muses... sales may start to pick up, but as inventory swells with further resets & vacant REO's, prices will continue to decline.

S&P Case Shiller data includes non conforming, jumbo, sub prime, interest only, low & no down data...

a more complete, realistic and grimer picture (13% Yoy decline) than today's OFHEO report.

Regardless, todays OFHEO report reflected the largest decline in the purchase only indexes 17 year history.

Video interview with James O'Sullivan, a senior economist at UBS Securities LLC: Home prices not near bottom, declines accelerating.

Comments