February 27, 2008

OFHEO Report on Home Prices: Down 1.3% in 4Q07; Down 0.3% in Past 12 Months

Filed under: Economy,Taxes & Government — Tom @ 3:32 pm

This is a national crisis?

The Office of Federal Housing Enterprise Oversight has released its Housing Price Index for the fourth quarter of 2007. It is the most comprehensive look at home-price activity in the US, as described here:

The HPI is a broad measure of the movement of single-family house prices. The HPI is a weighted, repeat-sales index, meaning that it measures average price changes in repeat sales or refinancings on the same properties. This information is obtained by reviewing repeat mortgage transactions on single-family properties whose mortgages have been purchased or securitized by Fannie Mae or Freddie Mac since January 1975.

The HPI serves as a timely, accurate indicator of house price trends at various geographic levels. Because of the breadth of the sample, it provides more information than is available in other house price indexes. It also provides housing economists with an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas.

Though not a bundle of roses, the results are not exactly the Armageddon Old Media wants to portray:

WASHINGTON, DC – U.S. home prices fell in the fourth quarter of 2007 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.3 percent lower on a seasonally-adjusted basis in the fourth quarter than in the third quarter of 2007. This decline was substantially greater than the 0.3 percent price decline between the second and third quarters. Over the past year, prices fell 0.3 percent, as the fourth quarter decline erased earlier price gains.

The full PDF can be found at the home page (PDF is pretty large; the excerpted text above is from the beginning of the PDF).

I’m withholding further commentary on this until Saturday, when I’m able to gauge how much Old Media coverage the report received. My bet: minimal.

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