Freddie Mac Also Reports a Drop in U.S. Home Values in Q-3

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According to Freddie Mac's (OTC:FMCC) third quarter Conventional Mortgage Home Price Index (CMHPI), home values dipped in the third quarter of 2010. This index report parallels FHFA's and S&P/Case-Shiller Home Price Indices reports also released this week.

Amy Crews Cutts, Freddie Mac deputy chief economist said, "Home sales in the third quarter declined from the second quarter, in part because of the expiration of the home-buyer tax credit. Although sales rose in August and September, the net decline over the quarter was still large. We're now seeing the effect of the sales slow-down in home purchase prices."

Report Highlights Include:

• The Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series for the United States registered a 1.9 percent decrease (-7.4 percent annualized) in the third quarter relative to the second quarter on a not-seasonally-adjusted basis. U.S. home values fell 3.1 percent relative to the third quarter a year ago.

• Home values fell in eight of nine Census Divisions, rising only in the New England Division.

• The revised change in home values for the second quarter of 2010 is an increase of 2.8 percent (11.8 percent annualized) relative to the first quarter of 2009 and a decrease of 0.5 percent relative to the second quarter of 2009.

• The CMHPI Classic Series, which includes data on both home purchase values and appraisals, indicated that average U.S. home values rose 1.4 percent (5.6 percent annualized) during the third quarter. Comparing the third quarter of 2010 with the third quarter of 2009, the Classic Series shows 1.0 percent depreciation.

Cutts further commented, "Distressed sales, including foreclosed properties and short sales, are still a big part of the market. The past three quarters we've seen encouraging numbers in delinquency trends as reported by the Mortgage Bankers Association, though the delinquency rates remain high. Our forecast is for economic conditions to continue to improve, which should lower delinquency rates further over the coming year and relieve some of the downward pressure on home prices."

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