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FHFA: Distressed assets significantly weighed down home prices

Prices didn't drop as much when subtracting troubled assets from the equation

If there was any question as to whether steep home price declines resulted from the influence of distressed home sales, the Federal Housing Finance Agency says it has the answer.

In a new white paper, the agency compared its standard FHFA home price indices to those where distressed sales were subtracted from the home price results.

The inevitable conclusion from the FHFA study: 

“FHFA distress-free indexes showed more modest price declines than FHFA’s standard price indexes during the early part of the housing bust.”

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