- Home prices fell at the fastest annual rate on record in the first quarter, but the pace of month-to-month declines continues to slow, a closely watched housing index showed Tuesday.
- Home Prices tumbled by -19.1% in Q1 2009 compared to Q1 2008.
- So far home prices have now fallen by 32.2% since the peak in Q2 2006 and are now at 2002 levels.
"We see no evidence that a recovery in home prices has begun," - David M. Blitzer (chairman of the S&P index committee)
They key to stabilizing the home prices is stabilizing the rate of defaults but according to Fitch report, subprime, pooled loans that have been modified are souring at high rates despite changes in the loan terms. Fitch said a conservative projection was that between 65% and 75% of modified subprime loans will fall 60-days or more delinquent within 12 months of the loan change.
“One reason for the high redefault rate was public pressure to modify loans even for borrowers who were likely to default whether the loan terms were changed or not. Fitch said another cause was falling home prices. Ultimately, these homeowners, deep underwater, walk away from the home, resulting in the redefault of a loan.” – Fitch Studies
Source: Seattle Times, CNN Money & WSJ
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