Freddie Mac has announced that its Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series for the United States registered a 1.1 percent decline from the first quarter of 2009 to the first quarter of 2010. In the first quarter of 2010, the U.S. Index was down 2.1 percent (-eight percent annualized) relative to the fourth quarter, on a not-seasonally adjusted basis.
“Home-value declines and continued low mortgage rates have kept home-buyer affordability relatively high. Mortgage rates on 30-year fixed-rate loans averaged five percent in Freddie Mac's Primary Mortgage Market Survey (PMMS) over the first quarter,” said Frank Nothaft, Freddie Mac vice president and chief economist. “House price measures tend to show a lot of seasonality, with values lower during the slow home-selling months of autumn and winter and higher during the greater-activity months of spring and summer. Examining year-over-year home-value changes largely controls for seasonality. Compared with the first quarter of 2009, the national index dipped slightly--down 1.1 percent--with three-of-nine regions posting price gains. Houses in the Pacific region were up 4.5 percent over the past year, and in the Middle Atlantic and West South Central states prices were up about one percentage point, on average. While values were up the most in the Pacific region over the past year, this gain occurred after values had fallen more than 30 percent over the two prior years, from the beginning of 2007 to the beginning of 2009.”
The CMHPI Purchase-Only Series includes only property values based on home purchases with a conventional mortgage 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 1.5 percent (-six percent annualized) during the first quarter.
Comparing the first quarter of 2010 with the first quarter of 2009, the Classic Series shows 6.7 percent depreciation. The CMHPI Purchase-Only Series had the following regional house-price changes:
Middle Atlantic Division (NJ, NY, PA): Decreased 0.4 percent (-1.7 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values increased 1.0 percent, and during the last five years, home values increased 10.1 percent.
West South Central Division (AR, LA, OK, TX): Fell 0.9 percent (-3.5 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values were increased 0.7 percent, and during the last five years, home values increased 16.6 percent.
New England Division (CT, MA, ME, NH, RI, VT): Declined 1.1 percent (-4.5 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values decreased 1.7 percent, and during the last five years, home values declined 6.5 percent.
Pacific Division (AK, CA, HI, OR, WA): Decreased two percent (-7.8 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values increased 4.5 percent, and during the last five years, home values have decreased 13.2 percent.
South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): Fell 2.3 percent (-8.8 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values decreased four percent, and during the last five years, home values fell 5.2 percent.
Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): Decreased 2.8 percent (-10.8 percent, annualized) in the first quarter of 2010. In the last 12 months, home values decreased 6.1 percent; during the last five years, home values declined 4.4 percent.
East North Central Division (IL, IN, MI, OH, WI): Decreased 2.9 percent (-11.2 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values decreased 3.4 percent, and during the last five years, home values decreased 8.9 percent.
East South Central Division (AL, KY, MS, TN): Decreased 3.1 percent (-11.9 percent, annualized) in the first quarter of 2010. Over the last 12 months, home values decreased 1.8 percent, and during the last five years, home values increased 8.7 percent.
West North Central Division (IA, KS, MN, MO, ND, NE, SD): Decreased 3.2 percent (-12.1, annualized) in the first quarter of 2010. Over the last 12 months, home values fell 1.3 percent; over the last five years, home values decreased 0.2 percent.
Unlike other home price indexes based on mean or median values of homes sold during a given period, the CMHPI 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 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 42 million records in the repeat-transactions database used to construct the classic Conventional Mortgage Home Price Index--this database includes transactions on one-family detached and townhome properties serving as collateral on loans originated through the first quarter of 2010 and purchased by Freddie Mac or Fannie Mae by April 30, 2010.
For more information, visit www.freddiemac.com.
