U.S. home prices fell 3.9 percent in January from a year earlier as the housing market struggled to recover from the worst crash in seven decades, according to the Federal Housing Finance Agency.
The drop was led by an 8.6 percent slump in the region that includes Arizona and Nevada, followed by a 5.6 percent retreat in the area that includes Florida, the agency said in a report today. Prices nationwide fell 0.3 percent from December, compared with the 0.2 percent decline that was the average estimate of 17 economists in a Bloomberg survey.
Mounting foreclosures are depressing values and bloating the inventory of properties for sale. The number of previously owned homes on the market rose 3.5 percent in February to 3.49 million, the biggest gain in almost a year, the National Association of Realtors said yesterday.
“Foreclosures remain extraordinarily high, which is adding to the supply of homes and depressing prices,” said Richard DeKaser, an economist at Parthenon Group in Boston.
The number of homes in foreclosure in January rose to a record 2.2 million, according to Lender Processing Services Inc. in Jacksonville, Florida. About 23 percent of homeowners with mortgages had negative equity in the fourth quarter, meaning their home-loan balances were higher than the value of their properties, CoreLogic Inc., a research company in Santa Ana, California, said in a March 8 report.
Fannie, Freddie Loans
The FHFA measures transactions of homes financed with mortgages backed by Fannie Mae or Freddie Mac. The data are based on repeat sales transactions that compare prices of the same properties over time. The report measures changes in values without providing a specific sales price.
The median U.S. price for a previously owned home sold in January was $157,900, according to the National Association of Realtors. It fell last month to $156,100, a nine-year low, the Chicago-based group said yesterday.
Sales of U.S. previously owned homes dropped 9.6 percent in February to a 4.88 million annual rate, according to the National Association of Realtors’ report. Purchases fell in all regions, led by a 12 percent decline in the Midwest and a 10 percent slump in the South.
At the current sales pace, the inventory of homes on the market in February would take 8.6 months to sell compared with 7.5 at the end of the prior month, according to the Realtors group. About 39 percent of the sales were properties with mortgages in default.