According to a Freddie Mac home price survey released Tuesday, home prices fell an annualized 1.3 percent in the third quarter, compared with appreciation of 0.5 percent in the second quarter.
Year-over-year price appreciation was only 1.9 percent, compared to the 7.8 percent annual growth experienced a year earlier.
“The decline in home values occurred broadly across the U.S. The [index] found prices falling in seven of nine regions and in 25 states during the third quarter,” said Frank Nothaft, Freddie Mac’s chief economist.
The Freddie Mac survey revealed that home prices in the Pacific region chalked the fastest rate of depreciation, at an annualized rate of 5.8 percent, while homes in the West South Central saw healthy gains of 4.9 percent.
Nothaft added that fewer and more restrictive financing options extended by banks and mortgage lenders have made it more difficult to purchase a home.
“The number of home sales fell during the third quarter, and the inventory of existing single-family homes for sale rose to 10.5 months by October, the highest level since 1985,” said Nothaft.
The Freddie Mac Conventional Mortgage Home Price Index Classic Series measures all loans outside of government programs, including data from both home purchase transactions and mortgage refinances based on purchase price and appraised value.
Last week, The National Association of Realtors (NAR) reported a 5.1% year-over-year median home price decline for October and the S&P/Case-Shiller index revealed a 4.9% yearly drop in the year ending September.
The OFHEO House Price Index, which measures data from sales and refinance transactions, was 0.4% lower in the third quarter than the second quarter, its first drop since 1994.