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.

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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



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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.