National HPI for June- Home Prices Down 7.8% vs. 2008

Year-Over-Year and Seasonal Comparisons Seen as Positives

National housing prices fell 7.8 percent in June 2009 compared to June 2008 representing the smallest year-over-year decline recorded to date in 2009, according to newly released data from First American CoreLogic and its LoanPerformance Home Price Index (HPI). June’s decline was a 0.7-percent improvement over the 8.5 percent decline in May*.

Month-over-month declines have been moderating in the first half of 2009. Between January and June 2009 home prices improved by 3.3 percent. This is the first time in four years that the spring and summer seasonal price trend exhibited its normal pattern.
The seasonal improvement in home prices in the first half of 2009 is a positive sign, but it is important to note that a decline in distressed sales, rather than an increase in traditional home sales prices, was responsible for the uptick.
Nevada (-25.4 percent) remained the top-ranked state for annual price depreciation barely edging out Florida (-25.1 percent), which, unlike other hard hit states, is experiencing worsening price declines in 2009. California (-17.0 percent) continued to improve in June and its depreciation rate is the lowest since October 2007. Arizona (-16.2 percent) and Illinois (-14.8 percent) round out the top five states for price declines. More than 15.2 million U.S. mortgages, or 32.2 percent of all mortgaged properties, were in negative equity position as of June 2009. June’s negative equity share was slightly lower than the 32.5 percent as of the end of March 2009, and it reflects the recent stabilization of home prices. The aggregate property value for loans in a negative equity position was $3.4 trillion, which represents the total property value at risk of default. Full negative equity data is available at http://www.loanperformance.com/loanperformance_hpi.aspx#NegEqReport

Salem
www.loansmodification.com
updated 8/24/09

A lot of my clients ask me of my opinion about the market and economy... So I try to give them an overview of what they should prepare for, so once in a while I post some of the articles that I think is relevant and importantSalemhttp://www.loansmodification.com/Today I am posting the following information. 8/13/09


About half of homeowners to have negative equity by 2011Analysts at Deutsche Bank say that the number of homeowners whose home value is less than what they owe on mortgage loans will double to 48% by 2011; currently 26% of homeowners have negative home equity. "We project the next phase of the housing decline will have a far greater impact on prime borrowers," said Karen Weaver and Ying Shen, analysts at Deutsche Bank. Among prime loans - which conform to underwriting and size guidelines of Fannie Mae and Freddie Mac - about 41% will be "underwater" by the first quarter of 2011 from 6% at the end of the first quarter of 2009. As for prime Jumbo loans, about 26% will be underwater by 2011. "The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding," said the Deutsche Bank analysts. Among subprime loans, 61% will be underwater by 2011. The drop in home prices is leading to negative home equity and incentivizing borrowers to walk away from their mortgage commitments. In regions such as Las Vegas and parts of Florida and California about 90% of homeowners are likely to see negative home equity by 2011. "For many, the home has morphed from piggy bank to albatross," the analysts said.

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