Analytics provider Lender Processing Services (LPS) has stated that its LPS Applied Analytics division updated its home price index (LPS HPI) with residential sales concluded in November 2011.

The LPS HPI summarizes U.S. home price trends by tracking sales each month in over 13,500 ZIP codes. Within each ZIP code, the LPS HPI tracks five price levels from low to high.

"Since the post-bubble drop in home prices eased in January of 2009, we've generally seen that
prices for homes in the lowest 20% of local markets in the metropolitan areas covered by
the LPS HPI now differ by more than the highest 20 percent from their levels 10 years ago," said
Kyle Lundstedt, managing director of LPS Applied Analytics. "In those metropolitan areas
where lowest-priced homes have increased in value, the differences between the high and low
ends of the market have usually shrunk; where they have decreased in value, the differences have grown."

The LPS HPI national average home price for deals in November 2011 was $199,000, which represents a dip of 0.6% in the month versus October 2011, reaching a price level not
seen since October 2002.

This is the fifth straight month of price decreases. The partial data available for December has indicated further price drops of roughly 0.8%. LPS reported partial data from November transactions in its December release, which proved a reasonable indicator for November's performance. 

The preliminary information showed a preliminary 0.5% estimated decline, compared to the 0.6% for the full month‟s data.

LPS HPI average national home prices are still on their downward slope that started after the market peak in June 2006, which was when the total value of the U.S. housing inventory covered by the LPS HPI stood at $10.8 trillion.

Since that peak, the value has droped 30.6% to $7.5 trillion. In the period of most rapid price dips, from June 2007 through December 2008, the LPS HPI national average home price dipped $56,000 from $282,000, which corresponds to an average yearly dip of 13.8%.

Since December 2008, prices have gone down more slowly, although interrupted by brief seasonal intervals of rising prices. Over this period of more slowly dropping prices, the national average home price has fallen roughly $26,000 from $226,000, the firm reported.

The November national average price is down 3.4% from the average price at the start of the year. November home prices were consistent with the seasonal pattern that has been happening since 2009.

Each year, prices have increased in the spring, but have reverted in autumn to a downward trend that not only erased the gains, but has led to an average 4.4% annual drop in prices to date. The national average home price has declined 4.8% over the most recent year to November 2011.

Price changes were mostly consistent across the country in November, increasing in 13%
of the ZIP codes in the LPS HPI. Higher-priced homes had somewhat smaller drops: 0.55% for the top 20% of homes (prices above $311,000), compared with 0.6% for the bottom 20% (below $100,000). The highest-priced homes, the top 1% (prices above $839,000), declined 0.47%.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.