Home Prices Plunge Again Setting Another Record

February 13, 2009

(ChattahBox) — The worst U.S. housing slump since the Great Depression is deepening as foreclosures drain value from neighboring homes and the economic recession worsens.  Home prices fell 12.4% during the fourth quarter of 2008, the largest year-over-year decline since the National Association of Realtors began keeping comprehensive records in 1979.

The median price for a U.S. home sold during the fourth quarter of 2008 fell to $180,100, down from $205,700 during the last quarter of 2007.

Adding to the problem the number of Americans collecting unemployment benefits rose to a record 4.81 million in the last week of January as companies such as Caterpillar Inc. and Home Depot Inc. slashed jobs. The U.S. lost 2.6 million jobs last year in the biggest workforce reduction since 1945.

U.S. foreclosure filings exceeded 250,000 for the 10th straight month in January as falling prices trapped owners in homes worth less than the mortgage, RealtyTrac Inc. said in a report today.

Distressed properties, the foreclosures and short sales that have flooded the market, accounted for 45% of all deals. That has driven sales volume up in Nevada, California, Florida and other states hit hard by foreclosures, but these heavily discounted homes have also pushed median prices down.

The vast majority of metropolitan areas, 134 out of 153, recorded price declines compared with the last quarter of 2007.

“Home markets are weak just about everywhere,” said Pat Newport, an analyst with HIS Global Insight, “but in a few states, distressed sales are driving transactions.”

Home prices and sales are tumbling even as mortgage rates are near all-time lows. The average U.S. rate for a 30-year fixed home loan is 5.16 percent this week, down from 5.25 percent a week earlier, Freddie Mac said. The rate dipped to 4.96 percent during the week of Jan. 15, the lowest ever recorded.


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