Home Prices Fall in 4Q -- but by How Much?

Home prices decreased at an annualized rate of 0.5% nationwide in the fourth quarter, according to the Conventional Mortgage Home Price Index Classic Series released by Freddie Mac, but the rate of decline jumps to 9.3% under a separate index based only on purchase transactions. The 9.3% annualized drop under the Conventional Mortgage Home Price Index Purchase-Only Series is the largest since the third quarter of 1972, Freddie Mac reported. (The CMHPI Classic Series is based on both home purchases and mortgage refinancings based on appraisals.) "The decline in home values occurred in every region in the U.S., according to the CMHPI Purchase-Only measure, and only four states posted gains in home values during the fourth quarter: Maine, North Dakota, South Dakota, and West Virginia," said Frank Nothaft, Freddie Mac's chief economist. "The Pacific region fell the most, at a 17.2% annualized rate, led by declines in home values in California of nearly 25% on an annualized basis." The CMHPI was jointly developed by Freddie Mac and Fannie Mae. Freddie Mac can be found online at http://www.freddiemac.com.