Freddie Price Index Shows Second Consecutive Quarterly Increase

Freddie Mac's Conventional Mortgage Home Price Index Purchase-Only Series registered a 0.9% gain for the third quarter from the second quarter, marking the second consecutive quarterly increase. Most importantly, Freddie reports that the increases of the past two quarters erased about two-fifths of the declines registered during the final quarter of 2008 and the first quarter of 2009. Year over year home sales prices in the third quarter were down 3.9%. Sales volume increased 15% between the first and the third quarter of this year, said Freddie Mac chief economist Frank Nothaft. He cited the 50-year low interest rates, higher affordability, tax incentives and efforts to stem foreclosures through loan modifications. "Moreover, the price gains were broad-based with increases in seven of nine regions during the third quarter, and all nine regions up from their first quarter values," he said. However, the CMHPI indicates that in most markets prices are still down, compared to their peak levels. For example, Mr. Nothaft said, according to CMHPI measurements home values in the New England, East North Central and Pacific areas are at 2004 levels, on average, and at 2005 levels in the South Atlantic, West North Central, and Mountain states. In the West South Central area values have tied their third quarter 2008 peak, while in the Middle Atlantic values have reached their 2006 levels and in the East South Central states are at their 2007 levels.