House Prices Fall Modestly in Fourth Quarter 2009


February 26, 2010

U.S. house prices fell slightly in the fourth quarter of 2009 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.1% lower on a seasonally adjusted basis in the fourth quarter than in the third quarter of 2009. Over the year ending with the fourth quarter of 2009, seasonally adjusted prices fell 1.2%.

The decline in prices in the fourth quarter was much more significant when measured without seasonal adjustment. The unadjusted national decline was 1.5%, a much larger drop than the 0.1% decline measured on a seasonally adjusted basis. FHFA’s seasonally adjusted monthly index for December 2009 was down 1.6% from its November value, reversing price increases over the prior months. The monthly change from October to November was revised downward to +0.4%, from an initial estimate of +0.7%.

While the national, purchase-only house price index fell 1.2% from the fourth quarter of 2008 to the fourth quarter of 2009, prices of other goods and services rose 1.9%. Accordingly, the inflation-adjusted price of homes fell approximately 3.1% over the latest year.

FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, fell over the latest quarter. The index declined 0.7% in the latest quarter and 4.7% over the four-quarter period.

Additional Findings Include:
-Of the nine Census Divisions, the Mountain and Pacific Divisions experienced the most significant price movements in the latest quarter. While prices fell 1.3% in the Mountain Division, typical price increases were 1.5% in the Pacific Division.

-Seasonally adjusted, purchase-only indexes indicate that prices rose in the latest quarter in 27 states and Washington, D.C. Prices rose over the latest four quarters in 19 states.

-As measured with purchase-only indexes for the 25 most-populated metropolitan areas in the U.S., four-quarter price declines were greatest in the Miami-Miami Beach-Kendall, FL area. That area saw price declines of 12.9% between the fourth quarters of 2008 and 2009. Prices held up best in the Washington-Arlington-Alexandria, DC-VA-MD-WV area, where prices rose 10.6% over that period.

Click here for the Federal Housing Finance Agency news release and detailed report.