Case-Shiller Reports Continued Erosion in Home Prices

Home prices continued to fall in November according to the
S&P/Case-Shiller Home Price Indices released this morning.  Both the 10-City and the 20-City Indices were
down 1.3 percent in November compared to the previous month and for the second
month in a row19 of the cities also saw their prices inch lower.   Phoenix was the only one of the 20 to post a
gain in November.

The year-over-year price declines in November widened from those in October.  The 10-City and 20-City Composites were down
3.6 percent and 3.7 percent respectively from November 2010 to November 2011
compared to the -3.2 percent and -3.4 percent annual rate of change in
October.  Thirteen of the cities in the
larger index also saw a large drop in annual prices than they had in October. 

Atlanta had the worst performance with its annual return down 11.8 percent.  Atlanta’s prices fell 2.5 percent in November
following a 5.0 percent decline in October, 5.9 percent drop in September and
2.4 percent loss in August.  As was the
case in October, only two cities, Detroit and Washington, DC saw an improved
annual rate, but in both cases that annual increase was lower than their
October number.

David Blizer, Chairman of the Index Committee at S&P Indices said,
“Despite continued low interest rates and better real GDP growth in the fourth
quarter, home prices continue to fall. 
Annual rates were little better as 18 cities and both Composites were
negative.  Nationally, home prices are
lower than a year ago.  The trend is down
and there are few, if any signs in the numbers that a turning point is close at
hand.”

The 10-City Composite is now about 1.0 percent above its crisis low reached
in April 2009 and the 20-City is 0.6 percent above the low it reached in March
2011.  Both Composites are close to 33
percent off of their 2006 peak levels. 
As of November average home prices across the U.S. are back to mid-2003
levels.

“It’s not telling us much we don’t know. A lot of people fell into the trap of looking at the upturn in housing starts at the end of the year and mistaking that for a turnaround in the housing market. That’s absolutely premature.” – Andrew Wilkinson, Chief Economic Strategist, Miller Tabak & Co., New York.

 

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FHFA: House Prices Rose 1% in November

The Federal Housing Finance Agency’s (FHFA)
Home Price Index (HPI) rose 1.0 percent from October to November reflecting an
increase in U.S. housing prices on a seasonally adjusted basis. As can be seen
in the figure below, the there is little difference between seasonally adjusted
and unadjusted FHFA figures.  The estimated
figure for October was revised down from a -0.2 change as first reported to -0.7.
 The current index is 183.8 a drop of 1.8
percent from November 2010 when the index was at 187.3. 

The current HPI is 18.8 percent below
the peak it reached in April 2007 and indicates that prices have returned to
roughly the same range as existed in February 2004.

The HPI is calculated using purchase
prices of houses with mortgages that have been sold to or guaranteed by Freddie
Mac or Fannie Mac.  The index is based on
100 representing prices for homes in the first quarter of 1991.

The HPI rose for all regions
except the Middle Atlantic division (New York, New Jersey, Pennsylvania) which
fell 0.2 percent.  The biggest increase
was in the West South Central Division (Oklahoma, Arkansas, Texas, and Louisiana)
which rose 2.1 percent.  West South
Central and West North Central (North Dakota, South Dakota, Minnesota,
Nebraska, Iowa, Kansas, and Missouri) were the only regions to increase on a
year-over-year basis.

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Credit Defaults Increase, Led by Mortgage Markets

Bank cards were the only type of
consumer debt to see a decline in defaults during December according to data
released today by S&P Indices and Experian. 
The S&P Experian Consumer Credit Default Indices showed increased
defaults in both first and second mortgages and in auto loans.  Driven primarily by the increase in mortgage
defaults, the national composite index rose from 2.22 percent in November to
2.24 percent in December, the highest rate since April of 2011.  In December 2010 the Index stood at 3.01
percent.

The default rate for second mortgages increased
from 1.26 percent to 1.33 percent, auto loan defaults rose to 1.27 percent from
1.17 percent and first mortgage defaults increased to 2.19 percent from 2.17
percent.  The default rate for bank cards
however dropped from 4.91 percent to 4.60 percent.  All rates have improved from those of one
year earlier when the default rate for second mortgages was 1.74 percent; first
mortgages, 2.93 percent; auto loans, 1.69 percent; and bank cards, 6.73
percent.

“Led by the
mortgage markets, the second half of 2011 saw a slight reversal of the two-year
downward trend in consumer credit default rates,” says David M. Blitzer,
Managing Director and Chairman of the Index Committee for S&P Indices.
“First mortgage default rates rose for the fourth consecutive month, as did the
composite. Since August, first mortgage default rates have risen from 1.92% to
the 2.19%. The composite also rose those months, from 2.04% to 2.24%.  The
recent weakness seen in home prices is reflected in these data.  Bank card
default rates, on the other hand, were favorable, falling to 4.6% in December.
This is more than a full percentage point below the 5.64% we saw as recently as
July 2011.

S&P Experian data highlighted
five Metropolitan Statistical Areas (MSAs). 
Three of the five showed increases in default rates for the month: Miami
increased from 4.47 percent to 4.73 percent; Dallas from 1.38 percent to 1.56
percent, and Los Angeles to 2.54 percent from 2.53 percent.  Chicago was unchanged at 2.84 percent and New
York decreased from 2.21 percent n November to 2.13 percent in December. 

Blitzer said
of the MSA data, “Given what we know about the mortgage markets, it is likely
that these cities are seeing this recent weakness because their housing markets
have still not stabilized.”


 

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CoreLogic: Home Prices Show Third Consecutive Monthly Increase

Home prices were up for the third
consecutive month
in May as measured by CoreLogic’s Home Price Index
(HPI.)  The three months of increases were
noted for both annual and month-over-month numbers.

The HPI increased by 1.8 percent
compared to April figures and was 2.0 percent higher in May 2012 than in May
2011.  Those numbers are for all home
sales including those of distressed homes, both short sales and real estate
owned (REO) transactions.

When distressed sales are removed from
the calculation home prices were up year-over-year by 2.7 percent and were 2.3
percent higher in May than in April. 
This is the fourth consecutive month-over-month increase.

CoreLogic’s forward-looking Pending HPI
which is based on Multiple Listing Service data measuring price changes in the
most recent month indicates that house prices, including distressed sales, will
rise by at least 1.4 percent from May to June and by 2.0 percent if distressed
sales are not included.

“The recent upward trend in
U.S. home prices is an encouraging signal that we may be seeing a bottoming of
the housing down cycle,” said Anand Nallathambi, president and chief
executive officer of CoreLogic. “Tighter inventory is contributing to
broad, but modest, price gains nationwide and more significant gains in the
harder-hit markets, like Phoenix.”

“Home price appreciation in the
lower-priced segment of the market is rebounding more quickly than in the upper
end,” said Mark Fleming, chief economist for CoreLogic. “Home prices
below 75 percent of the national median increased 5.7 percent from a year ago,
compared to only a 1.8 percent increase for prices 125 percent or more of the
median.”

Since home prices peaked in April
2006 the national HPI including all sales has fallen 30.1 percent and non-distressed
sale prices are down 22.2 percent.

The highest price appreciation
including distressed sales was seen in Arizona (12.0 percent), Idaho (9.2
percent) and South Dakota (8.7 percent). 
When distressed sales are excluded the greatest appreciation was noted
in Montana (9.1 percent), South Dakota (8.5 percent), and Arizona (7.3
percent).

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