Economy Watch: Case-Shiller, Fannie Mae
- Oct 01, 2014
The latest S&P/Case-Shiller Home Price Indices, which were released on Tuesday by S&P Dow Jones Indices, show a continuing slowdown in U.S. home price increases. The National Home Price Index gained 5.6 percent in the 12 months ending July 2014, while the 10-city and 20-city composites gained 6.7 percent over the same period. For the 12 months ending in June, the increase was 6.2 percent for the National and 8.1 percent for the two composites. Also, every city saw its year-over-year return slow down.
Case-Shiller’s National Index gained 0.5 percent in July compared with June, while the 10- and 20-city composites increased 0.6 percent for the month. New York led the metro areas with an increase of 1.1 percent. San Francisco, which has notoriously high prices for housing, saw the only monthly contraction among the top 20 metros, with prices off 0.4 percent.
“The broad-based deceleration in home prices continued in the most recent data,” David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, noted in a statement. “However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales.”
Fannie Mae Serious Delinquency Rate Below 2%
Fannie Mae reported on Tuesday that the the serious delinquency rate for the single-family mortgages that it owns or guarantees declined slightly in August to 1.99 percent, compared with 2 percent even in July. The serious delinquency rate is down from 2.61 percent in August 2013, and the current rate is the lowest level since October 2008.
According to the GSE, serious delinquencies involve mortgages that are “three monthly payments or more past due or in foreclosure.” Fannie Mae’s serious delinquency rate peaked in February 2010 at 5.59 percent; a “normal” rate is 1 percent or less.
The Fannie Mae serious delinquency rate has fallen 0.62 percentage points since this time in 2013. At that pace, the rate will be back under 1 percent in 2016 – after spending nearly a decade above “normal.” But the decline is still no sure thing, since the rate of decline has slowed somewhat in recent months.
Wall Street gyrated a lot on Tuesday, but ended the day down, with the Dow Jones Industrial Average losing 28.32 points, or 0.17 percent. The S&P 500 and the Nasdaq were both off 0.28 percent.