Continued Challenges for the U.S. Market: FHFA House Price Index Declines in Feb.

The 1.6% decline in the February FHFA House Price Index indicates that home prices will remain weak. This will likely have a negative effect on the U.S. housing market and the performance of the underlying collateral in U.S. residential mortgage-backed securities. The amount of shadow inventory (which S&P defines as outstanding properties whose borrowers are {or recently were} 90 days or more delinquent on their mortgage payments, properties currently or recently in foreclosure, or properties that are real estate owned), slow sales, and the high unemployment rate continue to be key concerns for the U.S. housing market. We can expect U.S. home prices to face continued challenges and remain weak through the spring as existing home sales slowly improve.

The Pacific region has seen the biggest growth in home prices in the past decade, increasing 116.3% (NSA) from 2000 through the mid-2007 peak, and decline, falling 36.2% (NSA) since the peak. During the same time period, the Mid-Atlantic home prices increased 90.4% (NSA) through the peak and declined only 12.8% (NSA) through February 2011. (See Chart)

For the full report, “The February FHFA House Price Index Fell In ALL Regions Indicating Continued Challenges For The U.S. Housing Market” published on April 22, click here

The posts on this blog are opinions, not advice.  Please read Standard & Poor’s disclaimer at [hyperlink]

 

The posts on this blog are opinions, not advice.
Please read our disclaimers for Ratings Services, Indices, Equity Research, Securities Evaluations and Risk Solutions.

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