Home Prices Double Dipping Sooner, Deeper Than Expected
CNBC Realty Track
Home Prices Worse Than Expected
By: Diana Olick
CNBC Real Estate Reporter
Prices lag sales. Say it again. Chant it if you will. On the way up and on the way down, that's the way it works.
We were therefore expecting to see a big drop in home prices a few months after the expiration of the home buyer tax credit, not now. Well they're here now. Today the FHFA, overseer of Fannie and Freddie, released its monthly home price report which chronicles the sale prices of homes with Fannie and Freddie loans.
Things had been improving last Spring, as other indices show as well, but not only did they take a dive in July, the June number was revised down, and the following quote in the report really says it all:
"The unusually large revision mainly reflects the addition of new data from late June that show considerably weaker prices than earlier in the month."
Keep in mind that in June, the tax credit was still in effect for closings. That means that home prices started to falter even before the tax credit had finished doing its work. The numbers for July show a 3.3 percent drop in home prices year over year, which is a lot lower than many expected and has some folks revising long term price expectations yet again.
"In our latest forecast we had them dropping 8 percent, but this number was a lot bigger than I though it would be," says Patrick Newport over at IHS Global Insight. "So I think maybe a ten percent drop over the next year...
Home Prices Worse Than Expected
By: Diana Olick
CNBC Real Estate Reporter
Prices lag sales. Say it again. Chant it if you will. On the way up and on the way down, that's the way it works.
We were therefore expecting to see a big drop in home prices a few months after the expiration of the home buyer tax credit, not now. Well they're here now. Today the FHFA, overseer of Fannie and Freddie, released its monthly home price report which chronicles the sale prices of homes with Fannie and Freddie loans.
Things had been improving last Spring, as other indices show as well, but not only did they take a dive in July, the June number was revised down, and the following quote in the report really says it all:
"The unusually large revision mainly reflects the addition of new data from late June that show considerably weaker prices than earlier in the month."
Keep in mind that in June, the tax credit was still in effect for closings. That means that home prices started to falter even before the tax credit had finished doing its work. The numbers for July show a 3.3 percent drop in home prices year over year, which is a lot lower than many expected and has some folks revising long term price expectations yet again.
"In our latest forecast we had them dropping 8 percent, but this number was a lot bigger than I though it would be," says Patrick Newport over at IHS Global Insight. "So I think maybe a ten percent drop over the next year...