Home prices fall in second quarter

The Federal Housing Finance Agency recently released its latest house price index, which found U.S. house prices fell 0.6 percent in the second quarter compared to the first quarter. Despite prices increasing 0.9 percent in June, the second quarter saw a 5.9 percent year-over-year decrease in home values.

The all-transactions house price index decreased 1.9 percent in the second quarter and down 4.5 percent over the last year. The purchase-only house price index also fell 5.9 percent from the second quarter of 2011 to the same quarter in 2010, while prices of goods and services rose 4.5 percent over the same time period.

In an interview with Bloomberg, Patrick Newport, economist at IHS Global Insight, said foreclosures are driving home prices down because banks want to get rid of the properties fast.

The U.S. Department of Commerce recently announced new home sales fell 0.7 percent in July to an annual rate of 298,000, the lowest level since February. In addition, the median price of single-family homes fell 6.3 percent from June, while increasing 4.7 percent from July 2010.  

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