Home prices fall in first quarter; pace of decline lessens

WASHINGTON, DC – U.S. home prices fell in the first quarter of 2009 according to the Federal Housing Finance Agency’s seasonally-adjusted purchase-only house price index. The previously announced, but revised January and February indexes showed increases in house prices, which were offset by a March decrease. The purchase-only HPI, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.5 percent lower on a seasonally-adjusted basis in the first quarter than in the fourth quarter of 2008. This decline was much more modest than the 3.3 percent decline in the prior quarterly period. Over the past year, seasonally-adjusted prices fell 7.1 percent from the first quarter of 2008 to the first quarter of 2009.

FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, showed more strength over the latest quarter than the purchase-only index. The all-transactions HPI rose 0.4 percent in the latest quarter and fell only 3.3 percent over the four-quarter period.

The quarterly report analyzing housing price appreciation trends was released today by FHFA Director James B. Lockhart. “Our latest data are consistent with growing evidence that housing market conditions may be stabilizing in some parts of the country, especially areas not covered by the other major repeat sales price index,” said Lockhart. “I am hopeful that this first quarter data combined with recent market stimulus programs, such as the first-time homebuyer tax credit and President Obama’s Making Home Affordable Program may mean that home price depreciation may be easing.”

While the national, purchase-only house price index fell 7.1 percent from the first quarter of 2008 to the first quarter of 2009, prices of other goods and services fell 0.9 percent. Accordingly, the inflation-adjusted price of homes fell approximately 6.2 percent over the latest year.

Significant Findings:

  • As estimated in FHFA’s seasonally-adjusted, purchase-only indexes, six of the nine Census Divisions experienced price declines in the latest quarter. Prices were weakest in the Mountain Census Division, which experienced a 3.1 percent price decline in the quarter and strongest in the New England Division, which saw a price increase of 1.3 percent.
  • Seasonally-adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 20 states. Prices fell over the latest four quarters in 46 states and Washington, D.C.
  • Of the newly-released purchase-only indexes for the 25 most-populated metropolitan areas in the U.S., four-quarter prices declines were greatest in the Miami-Miami Beach-Kendall, FL Metropolitan Division. That area saw price declines of 37.6 percent between the first quarters of 2008 and 2009. Prices held up best in the Dallas-Plano-Irving, TX Metropolitan Division, where prices rose 0.1 percent over that period.
  • FHFA’s standard all-transactions indexes, which are available for far more metropolitan areas than the purchase-only measures, indicate the strongest market conditions in parts of Texas and the weakest conditions in parts of California. Among the 294 ranked metropolitan areas, Corpus Christi, TX had the greatest price increase over the latest four quarters with a rise of 4.1 percent. With a 37.8 percent decline, prices in Merced, CA were the weakest.
  • Of the 20 ranked cities with the greatest four-quarter price declines (measured in the all-transactions indexes), all but two--Las Vegas-Paradise, NV and Phoenix-Mesa-Scottsdale, AZ--were in California or Florida. The complete list of state appreciation rates are on pages 13 and 14. The complete list of metropolitan area appreciation rates for a new, purchase-only series are on page 26 and are on pages 29-43 for all-transactions indexes.