S&P Case-Shiller Study says US House prices declined 18%, or did they?
On December 30th, CNNMoney posted that US Home prices declined 18% in one year (see below). They have in some places, but did they drop this much across the whole country?
The answer is, No!
One of the biggest problems with home price statistics is how they are measured. Anytime you have statistics that measure median homes sales in an environment of dislocated jumbo financing, the median home sales numbers will be much lower than normal. What this means is the price the home that was sold was 1/2 of the total number of home sold was down 18% from a year ago. But when you have conforming loan rates at 6%, Jumbo Conforming Rates at 6 3/4%, and Jumbo rates at 8% plus and strict income documentation requirements, it is no surprize that more lower priced homes sold than higher priced homes.
So this is the main factor driving median home prices …