Integrated Asset Services LLC (IAS), a default management and residential collateral valuations company, has released the latest IAS360 House Price Index (HPI). Based on the timeliest and most granular data available in the industry, the index for national house prices fell 0.3 percent in November. With the small decline, the third straight for the index, the leading benchmark for U.S. housing stands virtually unchanged from the beginning of 2009.

The South, for its part, jumped a solid 2.3 percent for November as the steady declines in Florida slowed. The Sunshine State slipped fractionally again for the month, but after dropping nearly 45% from its high-water mark in June 2006, the worst declines may be over. The Northeast, meanwhile, fell for the third month in a row, losing another 1.8 percent in October, as important population centers like Westchester County, N.Y., Morris County, N.J., and Frederick County, Md. suffered declines upwards of five percent. The Midwest, too, lost more ground for the month, slipping another 1.7 percent, while the West gained 0.5 percent for the second month in a row. 

“Given the weak labor market and the tight credit environment, it’s not surprising to see some weakening in prices through these winter months,” said Dave McCarthy, president and CEO of Integrated Asset Services. “Even in the best of economies, the winter season is associated with fewer home sales and increased days on market. And these are hardly the best of economies.”

Of particular concern is a stubbornly high unemployment rate that’s causing more Americans to fall behind on their mortgage payments. Recent reports suggest the number of distressed properties in the foreclosure pipeline is both substantial and growing. The resulting “shadow inventory” of real estate-owned (REO) that banks and mortgage companies are likely to place on the market could weigh on house prices well into 2010.

Mortgage rates, in the meantime, have begun to inch up, putting even more pressure on home buyers. On Dec. 24, Freddie Mac reported that the average 30-year fixed-rate mortgage was 5.05 percent, the first time the mortgage benchmark has been above five percent since the end of October.

“Despite the extent of the declines to date, the risk of renewed weakening in house price still looms large,” says McCarthy. “The potential for another wave of distressed properties coming to market, from both private sellers and banks, remains very high.”

The IAS360 uses “next-generation” trending methodology to identify market trends earlier than any other index. IAS data includes non-conforming, bank-owned, and conventional sales transactions segmented by property type in addition to those insured by the FHA and VA. The IAS360 also considers REO transactions along with arms-length transactions. The index is published weeks earlier than competing HPIs and refreshes historical trends as new data becomes available. The IAS360 is designed to report changes when they happen for the most accurate and useful view of the U.S. housing market.

For more information, visit www.iasreo.com.