Washington, DC — U.S. house prices fell slightly in the fourth quarter of 2009 according to the Federal Housing Finance Agency’s (FHFA) seasonally adjusted purchase-only house price index (HPI). The HPI, calculated using home sales price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.1 percent lower on a seasonally adjusted basis in the fourth quarter than in the third quarter of 2009. Over the year ending with the fourth quarter of 2009, seasonally adjusted prices fell 1.2 percent. The quarterly report  analyzing housing price appreciation trends was released today by FHFA Acting Director Ed DeMarco.
The decline in prices in the fourth quarter was much more significant when measured without seasonal adjustment. The unadjusted national decline was 1.5 percent, a much larger drop than the 0.1 percent decline measured on a seasonally adjusted basis.
FHFA’s seasonally adjusted monthly index for December was down 1.6 percent from its November value, reversing price increases over the prior months. The monthly change from October to November was revised downward to +0.4 percent, from an initial estimate of +0.7 percent.
While the national, purchase-only house price index fell 1.2 percent from the fourth quarter of 2008 to the fourth quarter of 2009, prices of other goods and services rose 1.9 percent. Accordingly, the inflation-adjusted price of homes fell approximately 3.1 percent over the latest year.
FHFA’s all-transactions house price index, which includes data from mortgages used for both home purchases and refinancings, fell over the latest quarter. The index declined 0.7 percent in the latest quarter and 4.7 percent over the four-quarter period.
The complete list of state appreciation rates  are on pages 13 and 14. The complete list of metropolitan area appreciation rates computed in a purchase-only series are on page 25 and all-transactions indexes are on pages 26-43.
As indicated in the monthly HPI release, published in January, FHFA has begun using enhanced software for the processing of address information in the underlying transactions data used to compute the HPI. The effects of the use of that new software are discussed in this quarter’s Highlights article.
FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than five million repeat sales transactions, while the all-transactions index includes more than 39 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 35 years.
FHFA analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased since the beginning of 2006 has been $417,000. Loan limits for mortgages originated in the latter half of 2007 through Dec. 31, 2008 were raised to as much as $729,750 in high-cost areas in the continental United States. Legislation generally extended those limits for 2009-originated mortgages. A recently enacted Congressional Continuing Resolution (PL111-88) further extended those limits for 2010 originations in places where the limits were higher than those that would have been calculated under pre-existing rules.
This HPI report  contains tables showing: 1) House price appreciation for the 50 states and Washington, D.C.; 2) House price appreciation by Census Division and for the U.S. as a whole; 3) A ranking of 299 MSAs and Metropolitan Divisions by house price appreciation; and 4) A list of one-year and five-year house price appreciation rates for MSAs not ranked.