Index Registers Record Home Price Drop

Freddie Mac's Conventional Mortgage Home Price Index's purchase-only series, which excludes refinancing data, registered the largest annual decrease in its 39-year history during 2008. Home sales prices dropped 9.5% on average during the year and their decline accelerated notably in the fourth quarter when the index registered a 17.9% annualized decrease compared to an 8% annualized fall during the third quarter. The fourth quarter index results for 2008 mark "the first time that year-over-year declines in home values were recorded in each of the nine regions of the country," according to Freddie Mac vice president and chief economist Frank Nothaft. The index also showed for the second consecutive quarter "every region of the nation experienced flat or declining home values," he said. He noted, however, that the range of declines was wide, with the West South Central area experiencing declines of one-tenth of 1% over the year while the Pacific region had a decline of 23%.