Average home price down in fourth quarter
Home prices were down in slightly more than half of U.S. metropolitan areas in the fourth quarter of 2007, according to a report by the National Association of Realtors (NAR).
Prices fell in 77 of 150 markets -- the most since the group began tracking values in 1979 -- and the decline was 10 percent or more in 16 metro areas, the NAR said. The median sale price of a U.S. home dropped 5.8 percent to $206,200 from $219,000 during the same period in 2006.
All five regions of the United States experienced price declines, led by the West with 8.7 percent. The drop was smallest in the Midwest at 3.2 percent.
The metropolitan areas with the biggest decreases were Lansing-East Lansing, Mich., (19 percent); Sacramento, Calif. (18.5 percent); Riverside and San Bernardino, Calif. (17 percent); and Jackson, Miss. (17 percent).
Of the 73 areas with price increases, 11 had gains of 10 percent or more, including Cumberland, Md. (19 percent); Yakima, Wash. (18 percent); and Binghamton, N.Y. (15 percent).
Prospective homeowners also found it more difficult to secure a mortgage in 2007, as lenders tightened standards amid rising foreclosures. Lenders made 14 percent fewer loans and 28 percent fewer jumbo loans, the latter of which cover up to $417,000 of a home’s value.
“The continuing crunch in the jumbo loan market that began in August has disproportionately reduced the number of transactions in higher price ranges,” said Lawrence Yun, the NAR’s chief economist. “Higher ratios of sales for more moderately priced homes are naturally dampening the national median price, as well as the data for some of the more expensive markets.”
Despite the decline in the fourth-quarter median home price, sellers who purchased their home in the fourth quarter of 2001 still saw a healthy average gain of 31.2 percent and an average home equity accumulation of $49,000.