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Home Prices Slip 2.4% as Foreclosures Drag Down Values

Thursday, 23 February 2012 10:52 AM

U.S. home prices fell 2.4 percent in the fourth quarter from a year earlier, as sales were boosted by investors seeking lower-cost distressed properties.

Prices dropped 0.1 percent from the prior three months on a seasonally adjusted basis, the Federal Housing Finance Agency said in a report from Washington. In December, prices retreated 0.8 percent from a year earlier, while increasing 0.7 percent from the previous month.

Foreclosures are boosting the supply of properties on the market and dragging down values for all houses. Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said last month.

Distressed properties, comprising foreclosures and short sales in which the lender agrees to a transaction for less than the mortgage balance, accounted for 35 percent of all existing- home purchases in January, the National Association of Realtors said yesterday.

The FHFA’s House Price Index measures changes in real estate values using purchases of properties with mortgages backed by Fannie Mae or Freddie Mac. It doesn’t provide a specific price for homes.

As measured by the National Association of Realtors, the median home price was $162,200 in December. In January, it fell to $154,700, the trade group said yesterday.

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Thursday, 23 February 2012 10:52 AM
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