Home Prices up 0.9% in Q3

Home prices rose 0.9 percent in the third quarter of 2009 according to Feddie Mac. Is the biggest housing recession since the savings and loan fiasco in the late 80’s and early 90’s finally ending?

This morning Freddie Mac released its Conventional Mortgage Home Price Index showing home prices in the United States as a whole are up 0.9 percent. The second quarter numbers were revised upward to show a 2.0 percent gain.

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The increases of the past two quarters of this year erase 40 percent of the home price declines during the last quarter of 2008 and the first quarter of 2009.

Frank Nothaft, Freddie Mac vice president and chief economist had the following comments:

The home-price gains of the past two quarters reflect improving existing home sales over that period. Sales volume was up 15 percent between the first and third quarters of this year. The lowest average fixed-rate mortgage rates in a half-century, lower house prices, incentives to encourage first-time buyers, and loan modification efforts to stem foreclosures have worked together to support sales and reduce the inventory of unsold homes.

Moreover, the price gains were broad-based with increases in seven of nine regions during the third quarter and all nine regions up from their first quarter values. Prices are still down relative to their peaks in most markets. For example, as measured by the CMHPI, values in the New England, East North Central and Pacific divisions are at 2004 levels, on average, and the South Atlantic, West North Central, and Mountain states’ home values are at 2005 levels. In contrast, average values in the West South Central area have tied their previous peak from the third quarter of 2008, while average home values in the Middle Atlantic and East South Central states have reached 2006 and 2007 levels, respectively.

Let’s hope the trend continues!