Foreclosures are boosting the supply of available properties and reducing prices, even as mortgage rates tumble to record lows. U.S. home prices dropped 3.3 percent in July from a year earlier, the eighth consecutive decline, the Federal Housing Finance Agency in Washington said in a Sept. 22 report.
The biggest price loss was 1.6 percent in the region that includes Florida, Georgia, North Carolina and South Carolina, according to the report. The area that includes Arizona and Nevada posted the second-largest decline, at 1.5 percent.
Nationally, sales of existing homes in July plunged 27 percent to a 3.83 million annual pace, the lowest level on record, according to the National Association of Realtors. July sales of new homes dropped to an annual pace of 276,000, the fewest since data began in 1963, according to the Commerce Department. NAR reports the time it would take to clear the market of homes for sale was 12.5 months in July, the highest in more than a decade of data. Banks seized a record 95,364 properties from delinquent borrowers in August, according to data provider RealtyTrac.
The average U.S. rate for a 30-year fixed loan fell to 4.32 percent in September. That's the lowest in mortgage-provider's Freddie Mac company's records, which date to 1971. Washington-based Fannie Mae, Freddie's larger rival, reports the rate probably will average 4.6 percent this year, down from 5 percent in 2009.