Freddie Mac (FRE) said Friday its index that tracks U.S. home
prices dropped at a 17.9% annual rate in the fourth quarter as
every region of the U.S. saw flat or declining home values for the
second straight period.
For the year, home prices dropped an average 9.5%, according to
the mortgage giant's Conventional Mortgage Home Price Index, the
largest annual decrease in the 39-year history of the index. The
annual rate of decline in the third quarter was revised to 8%.
In addition, the mortgage giant said the fourth quarter marked
the first time year-over-year declines were recorded in all nine
regions of the country. The Pacific region led decliners with a 23%
drop from a year earlier, while the fall for the West South Central
area was a scant 0.1%.
"The deepening recession and the large inventory of for-sale
homes continued to push home values down," Freddie Chief Economist
Frank Nothaft said. "While historically low interest rates on
long-term fixed-rate mortgages help the housing market, demand for
homes was weakened by rising unemployment, wealth declines from
declining stock market valuations, and general lack of consumer
confidence.
Freddie's home-price index showed home prices fell 8.1% in the
fourth quarter in the Pacific region from the third quarter. That
was followed by the South Atlantic with a 6.5% drop and the East
North Central with a 4.9% fall. The smallest drop was the West
South Central division at 1.6%.
Earlier this week, S&P/Case-Shiller home-price indexes
showed home prices continued their multiyear slide, with prices now
similar to late-2003 levels.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964;
lauren.pollock@dowjones.com