U.S. house prices fell 0.5 percent on a seasonally adjusted basis from June to July, according to the Federal Housing Finance Agency’s monthly House Price Index. The previously reported 0.3 percent decline in June was revised to a 1.2 percent decline. The unusually large revision mainly reflects the addition of new data from late June that show considerably weaker prices than earlier in the month. For the 12v months ending in July, U.S. prices fell 3.3 percent. The U.S. index is 13.8 percent below its April 2007 peak.
The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine Census Divisions, seasonally adjusted monthly price changes from June to July ranged from -1.6 percent in the South Atlantic Division to +1.1 percent in the Pacific Division.
This pretty much confirms that Case/Shiller, which is the main index followed by the market will decline as well. The only question is by how much?
Black Swan Insights
Home prices need to decline further.
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