Home Values Rise in Second Quarter

McLean, VA – Freddie Mac (OTC:FMCC) – (LoanSafe.org) – announced today the results of its second quarter Conventional Mortgage Home Price Index (CMHPI).

News Facts

*The Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series for the United States registered a 3.1 percent (13.2 percent annualized) increase in the second quarter relative to the first quarter on a not-seasonally-adjusted basis. U.S. home values fell 0.2 percent relative to the second quarter a year ago.

*Home values rose in all nine Census Divisions. This is the first time since the second quarter of 2009 that all Census Divisions have witnessed positive changes in home values.

Related Links

* Economic & Housing Research
* CMHPI Data
* Weekly Primary Mortgage Market Survey

* The revised change in home values for the first quarter of 2010 is a decrease of 2.3 percent (-8.9 percent annualized) relative to the fourth quarter of 2009 and a decrease of 1.3 percent relative to the first quarter of 2009.
*The CMHPI Classic Series, which includes data on both home purchase values and appraisals, indicated that average U.S. home values fell 0.5 percent (-1.8 percent annualized) during the second quarter. Comparing the second quarter of 2010 with the second quarter of 2009, the Classic Series shows 4.6 percent depreciation.

Quotes

Attributed to Amy Crews Cutts, Freddie Mac deputy chief economist

*”We saw increases in home values in the second quarter that were very strong across all regions – there is no doubt that some of this was due in part to the now-expired homebuyer tax credits which boosted sales activity as well as to the usual seasonal bump we see each Spring.

*”Although the homebuyer tax credit programs have expired, 30-year fixed mortgage rates have decreased by more than half a percentage point since the end of April, setting multiple new record lows according to Freddie Mac’s Primary Mortgage Market Survey®. We will be watching carefully the home sales reports in August and September to see whether the July drop was the start of a new trend down or the result of a temporary pull-forward due to the tax-credit programs.”

Regional Summary

The CMHPI Purchase-Only Series had the following regional house-price changes:

*East North Central Division (IL, IN, MI, OH, WI): rose 4.9 percent (21.2 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values decreased 1.7 percent, and during the last five years, home values decreased 7.4 percent.*West North Central Division (IA, KS, MN, MO, ND, NE, SD): increased 4.2 percent (17.9 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values were unchanged; over the last five years, home values increased 0.7 percent.

*Mountain Division (AZ, CO, ID, MT, NM, NV, UT, WY): increased 3.7 percent (15.9 percent, annualized) in the second quarter of 2010. In the last 12 months, home values decreased 3.8 percent; during the last five years, home values declined 5.2 percent.

*South Atlantic Division (DC, DE, FL, GA, MD, NC, SC, VA, WV): grew 3.6 percent (15.1 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values decreased 2.6 percent, and during the last five years, home values fell 5.8 percent.

*Pacific Division (AK, CA, HI, OR, WA): climbed up 3.1 percent (13.1 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values increased 4.2 percent, and during the last five years, home values have decreased 14.7 percent.

*East South Central Division (AL, KY, MS, TN): grew 2.8 percent (11.8 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values decreased 1.0 percent, and during the last five years, home values increased 8.8 percent.

*West South Central Division (AR, LA, OK, TX): rose 2.7 percent (11.4 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values increased 1.2, and during the last five years, home values increased 16.6 percent.

*New England Division (CT, MA, ME, NH, RI, VT): increased 1.3 percent (5.3 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values decreased 1.6 percent, and during the last five years, home values declined 9.0 percent.

*Middle Atlantic Division (NJ, NY, PA): increased 0.6 percent (2.6 percent, annualized) in the second quarter of 2010. Over the last 12 months, home values increased 1.0 percent, and during the last five years, home values increased 7.1 percent.

Conventional Mortgage Home Price Index Information

*The CMHPI Purchase-Only Series includes only property values based on home purchases with a conventional mortgage in its calculation. Freddie Mac also produces a CMHPI Classic Series that includes data from both home purchase transactions and mortgage refinancings, with the latter values based on appraisals. Generally, because appraisals are backwards looking through the use of recent comparable property transactions, the Classic Series will typically lag changes in the Purchase-Only series.

*Unlike other home price indexes based on mean or median values of homes sold during a given period, the CMHPI is constructed using regression techniques from observations of actual sales prices or appraised values of the same homes over time. The street addresses of properties that serve as collateral for mortgages are processed using software certified by the United States Postal Service to create a uniform address format and are then matched to identify consecutive transactions on the same property. There are currently more than 44 million records in the repeat-transactions database used to construct the classic Conventional Mortgage Home Price Index – this database includes transactions on one-family detached and townhome properties serving as collateral on loans originated through the second quarter of 2010 and purchased by Freddie Mac or Fannie Mae by July 30, 2010.

Freddie Mac publishes the CMHPI each quarter. Index values and growth rates for the classic series are available for the nation as a whole as well as for the nine Census divisions, the 50 states and the District of Columbia, and 392 metropolitan statistical areas (MSAs) and metropolitan divisions; index values and growth rates for the purchase-only series are available for the nation and nine Census divisions. All of the CMHPI series can be found on Freddie Mac’s web site, www.freddiemac.com/finance/cmhpi/.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Source: Freddie Mac