Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Home prices see biggest drop in 25 years

Housing values fall 1.3 percent nationwide in the third quarter, according to a Freddie Mac survey.

Subscribe to Real Estate
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

NEW YORK (CNNMoney.com) -- National home prices showed their biggest quarterly drop in 25 years during the third quarter of 2007, said a report Tuesday.

Freddie Mac's (Charts, Fortune 500) home price index fell 1.3 percent on an annualized basis in the quarter, according to its survey of home purchases and mortgage refinance appraisals.

"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 Frank Nothaft, Freddie Mac's chief economist.

He said that higher mortgage costs and tightened lending standards from banks had added to the challenge of buying homes.

Geographically, the Pacific region fell the most at a 5.8 percent annualized rate of decline, said Amy Crews Cutts, Freddie Mac's Deputy Chief Economist, while homes in the West South Central saw strong gains of 4.9 percent.

"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 Nothaft.

The rise in the Southwest was attributed to strength in the energy sector over the period.

Freddie Mac's index is constructed from actual sales prices and appraised values of homes whose mortgages are being refinanced. To top of page



Photo Galleries
Best business class airline lounges around the world Between August 2015 and May 2016, Skytrax surveyed over 19.2 million customers to find the best airline lounges. Here is what they found. More
What Boeing's new 737 Max 9 has under the hood Boeing unveiled its new, longer 737 Max 9 airliner earlier this month, the second member of the updated single-aisle jet family. The first aircraft will deliver to airlines starting in 2018. More
Toy Fair surfaces holograms, robotic animals, dolls for boys The Toy Industry Association's annual fair revealed countless tech-enabled toys -- and some fresh takes on old classics. More