FHFA: Home prices fall 4.8 percent during September in Mountain region

House prices in September in the Mountain region, which includes Colorado, fell 4.8 percent, year-over-year. Nationally, the house price index fell 2.1 percent. The new house price index numbers, released yesterday by the Federal Housing and Finance Agency, also showed that the national index is down 18.1 percent from the peak level reached in June 2007, while the Mountain region's index is down 31.4 percent over the same period.

The FHFA monthly index is calculated using purchase prices of houses purchased with loans that have been sold to or guaranteed by Fannie Mae or Freddie Mac. It is a repeat-sales index similar to the Case-Shiller index, but limited to GSE loans.

The decline in house prices reflects overall trends also found in other home price indices such as the CoreLogic index and the Case-Shiller index. According to FHFA, prices have largely stabilized over the past several months, but remain slightly down from 2009 and 2010 levels.



The second chart shows each month's house price index compared to the same month a year earlier:



We can note that the Mountain region has performed more poorly (from a seller's perspective) than the national index. This runs contrary to some local experience and some statistics. The Case-Shiller data for the Denver metro area, for example shows that local prices did not decline as much as the national composite index following the financial panic in 2008. Also, the FHFA "expanded-data" index shows Colorado performing better than the national index.

Since we're looking at regional, data, however, we have to keep in mind that this data reflects house prices in Arizona and Nevada, and this no doubt will continue to put downward pressure on regional prices for now.

Nevertheless, the overall trend among most home price indices is one of slow downward movement in home prices. This trend includes Colorado statewide as well as the metro Denver area.