TEXAS HOME PRICES STABLE, BUT MARKET STRESS SHOWING
COLLEGE STATION (Real Estate Center) – U.S. home prices continued a downward trend in second quarter 2011, according to the Federal Housing Finance Administration's (FHFA) home price index (HPI) results, which were released Wednesday. Texas home prices fared better, but Real Estate Center Research Economist Dr. Jim Gaines said market stress is beginning to show.
"Texas’ seasonally adjusted purchase-only HPI increased a slight 0.3 percent from first quarter 2011, the first quarterly positive change after three consecutive quarterly declines," Gaines said. "On an annual basis, the index declined 1.9 percent since second quarter 2010, the third straight quarter with a year-over-year fall.
"Since peaking in fourth quarter 2007, Texas’ seasonally adjusted purchase-only index is down only 1.6 percent compared with the national 20 percent drop. This overall drop indicates the relative stability of prices in Texas while much of the rest of the country has been struggling with significant value declines."
Gaines said Texas’ seasonally adjusted "expanded-data" index (EDI) indicated home values here declined 1.4 percent from the first quarter, continuing a trend of decline in five out of the previous six quarters. The state’s EDI fell 3.1 percent from second quarter 2010, the fourth consecutive year-over-year decline in the index.
"Still, as with the standard index measures, the overall change in Texas home values indicated by the EDI since the market peaked in 2007 is significantly better," Gaines said. "The total decline in the Texas EDI since fourth quarter 2007, when the index peaked, is only 5.6 percent, about one-fourth of the total U.S. rate of decline."
