Two readings of U.S. home prices to be released Tuesday will give investors and homeowners a sense of how far the housing market slipped at the end of 2007.
The Standard & Poor's/Case-Shiller monthly report on home prices for December is due at 9 a.m. EST. The Office of Federal Housing Enterprise Oversight releases its fourth-quarter 2007 report at 10 a.m. EST.
The indexes offer different pictures of the housing market. The Case-Shiller index, which focuses on major U.S. cities, has shown falling prices for months, while the government's year-over-year index has yet to slip into negative territory.
The government's index is calculated using loans of $417,000 or less that are bought or backed by government-sponsored Fannie Mae and Freddie Mac. It does not include properties bought with some of the riskier varieties of home loans that have gone sour over the past year.
Since peaking in mid-2005, the rate of home price appreciation in the government index has dropped off sharply to an increase of 1.8 percent in the third quarter of 2007, the smallest increase since 1995. It close to flat in parts of 1990 and 1991, but index has never dropped compared with a year earlier.
Both indexes examines price changes for the same properties over time instead of calculating a median price for houses sold during a particular month or quarter. Doing so prevents the data from being skewed by changes in the mix of houses sold. For example, sales of more expensive homes in any particular month or quarter would push median prices upward.
Home prices as measured by the 10-city Case-Shiller index fell in November for the 11th-straight month, dropping a record 8.4 percent. A broader reading measuring 20 metropolitan areas fell 7.7 percent in November.
Monday brought more bad housing market news, as the National Association of Realtors reported that sales of existing homes fell to the lowest level in nearly a decade in January while the median price for a home dropped for the fifth straight month. The median price of a U.S. home sold in January slid to $201,100, a drop of 4.6 percent from a year ago, according to the Realtors group.
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