The Office of Federal Housing Enterprise Oversight (OFHEO) reported home prices on its Purchase Only Index fell a seasonally adjusted 0.8% in April. Year-over-year prices are down 4.6%.
The Pacific region had the largest year-over-year decline at negative 15%, followed by the Mountain states at negative 4.9% and South Atlantic states at negative 4.8%. Two regions have seen positive year-over-year growth with the West South Central states up 1.9% and the East South Central higher by 0.1%.
"House prices on a nationwide basis have retreated to their December 2005 levels," said OFHEO Director James Lockhart.
Because OFHEO's index has a broader geographic reach and narrower range of financing types versus other house price indexes, home price declines are comparatively muted, said Lockhart.
Earlier today, the Standard & Poor's/Case Shiller HPI for April was reported with the 10-city composite index down 1.6% in April and the 20-city composite down 1.4%, which is nearly twice as much as what OFHEO reported for April.
Year-over-year, the 10- and 20-city composites are at record lows of negative 16.3% and negative 15.3%. Las Vegas, Miami and Phoenix are there worst performing MSAs year-over-year with price declines of 26.8%, 26.7% and 25%. The MSAs with the lowest year-over-year price declines are Charlotte (negative 0.1%), Dallas (negative 3.4%), and Denver and Portland (both negative 4.7%).
Deutsche Bank Economist Joseph LaVorgna believes that home prices will continue to move lower. He stated several reasons for this: the supply of available homes remains high and will likely increase due to rising foreclosures, housing affordability remains low, hurt by slowing income and increasing mortgage rates, and the difficulty of getting a mortgage due to the de-leveraging of financial institutions and their tightening in lending standards.
What will it take to start a recovery? LaVorgna said it won't happen until home prices fall enough to bring in investors or speculators or financial institutions can start voluntarily increasing their balance sheets.