January was not a good month for U.S. home prices, especially in the Midwest, according to Clear Capital’s monthly Home Data Index (HDI).
Home prices fell 2.6% in January on a nationwide basis, thanks primarily to a 5.2% dip in the Midwest and a 3.5% fall in Western United States, the report said. Midwest had seen a 3% dip in December (see picture.)
“National home prices bucked three months of stability and posted a loss of 1.6% quarter-over-quarter, more than a full percentage point in lost value compared to last month’s decrease of 0.4%,” HDI said.
Homes sold by banks and other agencies (REOs), an indicator of foreclosure activity, rose from 24.8% at the end of December to 25.4% at the end of January, the company said. Both the Midwest and the West of the country saw 31% of their total home sales under the REO category.
Clear Capital is a provider of data for real estate asset valuation and risk assessment for large financial services companies and conducts appraisals, property condition inspections, value reconciliations etc..
House prices were stable in the Northeast of the U.S., according to the report, remaining at 0.1% above their year-ago levels in January.
House prices are important indicators of economic confidence. A crash in U.S. home prices triggered the recession of 2008-09.
House prices are down by an average of around 41% from their peaks in 2006, but the Northeast of the country has seen a dip of only around 23%, according to the report.
The best performing areas were Birmingham-Hoover in Alabama, up 4.3%, and Phoenix, Arizona (up 3.2%.)
Atlanta, Georgia (dip of 19.2%) and Detroit (down 11.9%) were the worst performers. Homes in Detroit have lost 77% of their value from their peaks of 2006 on average, but are still 10.8% above their lowest points in 2009. REOs accounted for 51.8% of the total home sales in the city.