Prices Up For Second Straight Quarter in Freddie Index
Home prices increased for the second straight quarter in Freddie Mac’s (FRE) Conventional Mortgage Home Price Index (CMHPI). The purchase-only index increased 0.9% from Q209 to Q309, following a 2% increase from Q109 to Q209. The two quarters of increases are equal to about 40% of the declines experienced in Q408 and Q109. For the 12-month period ending in Q309, home sales prices were down 3.9%. “The home-price gains of the past two quarters reflect improving existing home sales over that period. Sales volume was up 15% between the first and third quarters of this year,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The lowest average fixed-rate mortgage rates in a half- century, lower house prices, incentives to encourage first-time buyers, and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes.” Price gains were broad-based, as seven of nine regions experienced gains during the quarter. All nine regions are up from first quarter prices. Prices in the New England division (Conn., Mass., Maine, NH, RI and Vt.) declined 0.7% in Q309. The Mountain Division (Ariz. Colo., Idaho, Mont., NM, Nev., Utah and Wyo.) also decreased 0.6% in the same period. The Pacific Division, which includes Alaska, Calif., Hawaii, Ore. and Wash., experienced the greatest increased in Q309, at 3.9%, but for the last 12 months, prices are still down 6.9%. The Middle Atlantic States of NJ, NY and Penn. saw a 1.1% increase in Q309 but is still down 2.5% from a year ago. The South Atlantic Division (DC, Del., Fla., Ga., Md., NC, SC, Va., and WV) increased 0.6% in Q309, but prices are down 5% from a year ago. The West North Central Division (Iowa, Kan., Minn., Mo., ND, Neb., and SD) increased 0.5%, but is down 1.1% from last year. In the East South Central Division states of Ala., Ky., Miss., and Tenn., prices increased 0.2% in Q309 and prices are down 1.4% from last year. The East North Central Division (Ill., Ind., Mich., Ohio and Wis.) rose 0.2% in Q309, but values are still down 2.7% from last year. The West South Central Division states of Ark., La., Okla. and Texas also eked out a 0.1% increase in Q309, bringing prices equal to their level one year ago. “Prices are still down relative to their peaks in most markets. For example, as measured by the CMHPI, values in the New England, East North Central and Pacific divisions are at 2004 levels, on average, and the South Atlantic, West North Central, and Mountain states’ home values are at 2005 levels,” Nothaft said. “In contrast, average values in the West South Central area have tied their previous peak from the third quarter of 2008, while average home values in the Middle Atlantic and East South Central states have reached 2006 and 2007 levels, respectively,” he added. Write to Austin Kilgore.