Freddie Mac has announced today that its Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series registered a 0.4 percent from the fourth quarter of 2008 to the fourth quarter of 2009, a much smaller decline than the 9.5 percent drop in home prices recorded in 2008. In the final quarter of 2009, the U.S. Index was down 1.4 percent (-5.4 percent annualized) relative to the third quarter, on a not-seasonally adjusted basis.
“Mortgage rates on 30-year fixed-rate loans hit an all-time low in Freddie Mac’s Primary Mortgage Market Survey (PMMS) in December and averaged 4.9 percent over the fourth quarter. Low rates coupled with the first-time homebuyer tax credit helped boost home sales to their highest level in two-and-a-half years, seasonally adjusted,” said Frank Nothaft, Freddie Mac vice president and chief economist. “We normally see a seasonal effect in the fourth quarter price index that reduces its value. A year-over-year comparison largely controls for this. Over 2009, the national index dipped slightly, -0.4 percent, and four-of-nine regions posted price gains, with the Pacific region showing a third consecutive quarterly gain as well as an annual increase in prices.”
The CMHPI Purchase-Only Series excludes all refinancings in its calculation. Freddie Mac also produces a CMHPI Classic Series that includes data from both home purchase transactions and mortgage refinancings, with the latter values based on appraisals. Generally, because appraisals are backwards looking through the use of recent comparable property transactions, the Classic Series will typically lag changes in the Purchase-Only series. The CMHPI Classic Series indicated that average U.S. home values fell 0.7 percent (-2.8 percent annualized) during the fourth quarter and depreciated 4.3 percent over 2009.
The CMHPI Purchase-Only Series had the following regional house-price changes:
Pacific Division (AK, CA, HI, OR, WA): rose 0.5 percent (1.8 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values increased 1.6 percent, and during the last five years, home values have decreased 8.0 percent.
East South Central Division (AL, KY, MS, TN): decreased 0.1 percent (-0.4 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values increased 0.8 percent, and during the last five years, home values increased 14.4 percent.
Middle Atlantic Division (NJ, NY, PA): decreased 0.1 percent (-0.4 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values decreased 0.1 percent, and during the last five years, home values increased 12.4 percent.
West South Central Division (AR, LA, OK, TX): fell 0.2 percent (-1.0 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values were increased 1.5 percent, and during the last five years, home values increased 19.3 percent.
West North Central Division (IA, KS, MN, MO, ND, NE, SD): decreased 0.7 percent (-2.8, annualized) in the fourth quarter of 2009. Over the last 12 months, home values rose 1.1 percent; over the last five years, home values increased 3.8 percent.
New England Division (CT, MA, ME, NH, RI, VT): declined 0.7 percent (-2.7 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values decreased 0.1 percent, and during the last five years, home values declined 3.6 percent.
Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): decreased 2.8 percent (-10.9 percent, annualized) in the fourth quarter of 2009. In the last 12 months, home values decreased 7.0 percent; during the last five years, home values increased 2.6 percent.
East North Central Division (IL, IN, MI, OH, WI): decreased 3.2 percent (-12.1 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values decreased 0.9 percent, and during the last five years, home values decreased 6.0 percent.
South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): fell 3.2 percent (-12.1 percent, annualized) in the fourth quarter of 2009. Over the last 12 months, home values decreased 1.8 percent, and during the last five years, home values increased 1.0 percent.
Unlike other home price indexes based on mean or median values of homes sold during a given period, the Conventional Mortgage Home Price Index is constructed, using regression techniques, from observations of actual sales prices or appraised values of the same homes over time. The street addresses of properties that serve as collateral for mortgages funded by the two secondary mortgage market firms are processed using software certified by the United States Postal Service to create a uniform address format and are then matched to identify consecutive transactions on the same property. There are currently 41 million records in the repeat-transactions database used to construct the classic Conventional Mortgage Home Price Index--this database includes transactions on one-unit detached and single-family town home properties serving as collateral on loans originated through the fourth quarter of 2009 and purchased by Freddie Mac or Fannie Mae by Jan. 31, 2009.
For more information, visit www.freddiemac.com.
