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Home Prices Drop Again in FHFA Report

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US house prices dropped another 0.2% on a seasonally adjusted basis from January to February, following a 0.6% drop the month before, according to the Federal Housing Finance Agency (FHFA) house price index (HPI). While there have been scattered upward ticks since the 13.3% fall from the April 2007 peak, the curve on the double-dip might be taking shape as shown in the graph below. For the 12 months ending in February, US prices dropped 3.4% But the FHFA measurements aren’t translating to Trulia.com listings. Research from the company showed the rate of house listings where the seller reduced the price at least once declined 26% in April. “As the federal stimulus comes to an end this month, coupled with expected increases in interest rates and foreclosures, the next few months will be very telling for whether the U.S. housing market can be self-sustaining over the longer-term,” said Trulia co-founder and CEO Pete Flint. It should be noted that although Trulia currently lists roughly 3.5m homes, Fannie and Freddie provide more than $6.3trn in funding for the US mortgage markets. The FHFA calculates its monthly index using purchase prices of houses backed by mortgages sold or guaranteed by the government-sponsored enterprises (GSEs) Fannie Mae (FNM) or Freddie Mac (FRE). For the nine regions monitored by the FHFA, the most significant seasonally adjusted price drop from January to February was a 1.7% drop in the South Atlantic Division, which includes states along the Atlantic coast from Delaware down to Florida. The Middle Atlantic Division, which includes New York, New Jersey and Pennsylvania, had the largest increase at 1.9%. Write to Jon Prior.

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