WASHINGTON, DC – U.S. home prices fell in the second quarter of 2008 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.4 percent lower on a seasonally-adjusted basis in the second quarter than in the first quarter. This decline was less steep than the 1.7 percent decline in the prior quarter. Over the past year, prices fell 4.8 percent between the second quarter of 2007 and the second quarter of 2008. The decline is the largest in the purchase-only index’s 17-year history, but is much smaller than those of other indexes.
OFHEO’s all-transactions House Price Index (HPI) fell 1.4 percent in the latest quarter and was down 1.7 percent over the four-quarter period.
The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends.
“Tighter credit conditions and relatively high inventory levels led to some sharp price declines in the second quarter,” said Lockhart. “However, the majority of Metropolitan Statistical Areas (MSAs) posted positive four-quarter growth.”
The monthly index, which is a purchase-only measure of price changes, was flat between May and June on a seasonally-adjusted basis, but was down 5.0 percent since the April 2007 peak. In June, seasonally-adjusted prices in thePacific Census Division were 17.6 percent off their early 2007 peak, making it the worst performing Division. By contrast, June prices in the West South Central Division reached a new high.
While the national purchase-only house price index fell 4.8 percent between the second quarters of 2007 and 2008, prices of other goods and services increased 5.3 percent. Accordingly, the inflation-adjusted price of homes fell approximately 10.1 percent over the latest year.
“The most overbuilt areas of the country–including California, Nevada, Arizona, and Florida–contrast greatly with most other states, where prices are declining more moderately or even increasing,” said OFHEO Chief Economist Patrick Lawler. “Nationally, the substantial declines in the weakest markets have driven seasonally adjusted prices down to late-2005 levels.”
Read the entire report here
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