Simone Baribeau
The OFHEO numbers include only new conforming mortgages: mortgages of less than $417,000 purchased by Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks) and Freddie Mac(FRE Quote - Cramer on FRE - Stock Picks). Conforming loan limits were temporarily raised in February, but Fannie and Freddie did not start buying the larger mortgages until after the end of the first quarter.
The survey's results might have been more pronounced if it included nonconforming mortgages: Some areas that have experienced drastic price volatility in recent years have median home prices above the conforming loan limit. Between 2000 and the nationwide height of housing prices in 2007, home prices rose almost 70% nationwide, according to the OFHEO index. Rent of primary residence only rose 30%, according to the Bureau of Labor Statistics. The gap suggests some of the run-up in home prices may have been the result of a bubble and that housing prices have a long way to go before fully correcting. But housing prices aren't falling evenly across the country. Many of the areas which saw the greatest run-ups in housing prices are also experiencing the greatest declines. Housing prices in California, Nevada and Florida, for instance, more than doubled between 2000 and their heights in 2006. Housing prices in those states have since fallen 12%, 11% and 8%, respectively, according to the OFHEO's all-transactions housing price index.
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