DOW JONES NEWSWIRES
House-price declines slowed markedly in the first quarter,
according to Freddie Mac (FRE), with the drop being 5.3% on an
annual basis.
That compares with an 18.5% annualized slump in the fourth
quarter for the Conventional Mortgage Home Price Index. In the past
four quarters, U.S. prices fell 8.4%, compared with the 9.7%
decline for all of 2008.
Freddie chief economist Frank Nothaft said the slowing price
drop "was consistent" across the country, with New England and the
East North Central states actually seeing some increase from the
fourth quarter. New England prices rose 0.8% in the first quarter,
while the Rust Belt states of Illinois, Indiana, Michigan, Ohio and
Wisconsin recorded a 0.5% increase. That region has been among the
most stagnant economically as the recession wears on.
The three Pacific Coast states plus Alaska and Hawaii reported
the biggest first-quarter price drop - 4%. The average has slid 21%
the past year, by far the worst performing region. California
markets were among the fastest rising before the housing bubble
burst.
Nothaft said price declines will continue in markets with high
levels of vacant homes for sale, likely resulting in the home-price
index falling nationally "over several more quarters. Nonetheless,
it is important to realize that some local markets will experience
stable or modestly rising prices even though the national metric
may decline."
Falling home prices have been a key part of the drop in surging
delinquencies and foreclosures. The declines, especially in what
were some of the nation's most-overheated markets, have prevented
borrowers from refinancing their mortgages as the loan amount
exceeds the home's reduced value. As such, some borrowers not
forced out are voluntarily giving up their homes without hope they
could break even soon.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com
