Freddie Mac released last week its quarterly Conventional Mortgage Home Price Index (CMHPI) for the fourth quarter.

The classic series (which includes purchase and refinance transactions) recorded a 0.5% annualized decline in home values, improving from a revised negative1.5% annualized rate in the third quarter. The GSE said this was the first consecutive quarterly decline since 1982. Over the year, home values gained just 0.3% compared with 6.2% in 2006.

For the purchase-only series, Freddie Mac reported a 9.3% drop in prices in the fourth quarter on an annualized basis. This is the largest drop since the third quarter of 1972. For the year, prices in the purchase-only series were down 0.9%.

These results were in line with a recent report from the Office of Federal Housing Enterprise Oversight (OFHEO). The OFHEO reported a 0.1% annualized increase for all transactions, and a gain of 0.8% for the year in home prices. In its purchase-only index, the OFHEO had prices down 5.2% annualized in the fourth quarter. Year over year, prices were down 0.3%.

Looking at Freddie Mac's classic series by regions, the Pacific states, which include California, experienced the worst home price declines for the quarter and the year at 8.1% annualized and negatively 3.0%, respectively.

Other regions recording declines for the quarter were the Mountain states, which include Arizona and Nevada, at just negative 0.1% and South Atlantic, which include Florida, at negative 0.6%.

Year over year, however, the Mountain region held positive at 1.9% home price appreciation, while the South Atlantic states were slightly negative at -0.3%. New England states also recorded a year over year price decline of 0.9%, although it experienced a 1.2% annualized gain for the fourth quarter.

The East South Central, West South Central, West North Central and East North Central states all showed growth ranging from 2.8% to 3.5% annualized for the fourth quarter. Year over year, the highest growth areas were West South Central states at 4.6% and East South Central at 4.2%.

The West South Central states (AR, LA, OK, TX) are benefiting from "a robust energy industry," said Freddie Mac Deputy Chief Economist Amy Crews Cutts.

In the purchase-only series, all regions of the country had negative price declines for the quarter with (no surprise) the Pacific states ranking the worst at negative17.2% annualized. Freddie Mac added that only four states posted gains in home values during the quarter: Maine, North Dakota, South Dakota and West Virginia.

"The financial market turmoil that started in the third quarter continued into the fourth, making it harder to get mortgage financing for a home purchase or refinance and foreclosures continued to rise, putting additional stress on the inventory of homes for sale," Freddie Mac Chief Economist Frank Nothaft said.

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