Housing Prices Are 28.3% Below Peak in Mid-2006

National home prices have been on the decline since June 2006 with a few bursts of increases, which Lender Processing Services (LPS) attributes to seasonal trends. Overall, prices have declined 28.3% since their peak in June 2006, according to LPS’ new home price index.

From July 2007 to December 2009, prices declined an average of 13.8% annually. The total decline for this period of rapid decline was $56,000, according to LPS. After December 2009, prices began to decline at a slower pace, posting an annual decline of 3.6% and falling a total of $20,000 from December 2009 to the present.
LPS reports home prices fell 0.9% across the nation in August, after a smaller 0.4% decline the previous month. August prices were 3.8% below last year’s prices. This ended a series of increases during the spring of this year; a pattern that has occurred each year since 2009. In addition, the early, partial data for September sales indicates a likely further decline of approximately 1.1% to come. Price declines were relatively steady across the country in August, though declines varied somewhat between higher- and lower-priced homes.
Higher-priced homes – those above $321,000 – declined by 0.72%, while homes below $103,000 declined 1% in August. 23 of the 26 largest MSAs declined in August. Prices in Chicago, Detroit, and Minneapolis remained relatively the same from July to August. Among the MSAs with the greatest declines during the month of August, most were in California or Arizona. However, the greatest decline occurred in Gainesville, Georgia, which posted a 3% decline for the month. Prices have fallen 0.4% nationally since the beginning of this year. Prices in 10 of the 26 largest MSAs have declined since the beginning of the year.
The largest of these declines have occurred in Atlanta and Phoenix, which have seen declines of 10.5% and 5.2% respectively. In contrast, the largest increases since the beginning of the year have taken place in Detroit and Pittsburgh, which have seen increases of 10.8% and 4.5% respectively.

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