March 28, 2011 (Chris Moore)
The Winans International Real Estate Index (WIREI)™ reports that new home prices have declined 24% from their high in 2007 to a new low of $224,050, the worse price decline since the Depression. This eclipses the indices previous record low in October, 2010, of $229,300.
The all time high for the Index was in March of 2007 when the index reported new home prices averaged $296,000, a 110 year peak.
“This marks the worst price decline in U.S. new home prices since the 33% decline from December 1939 to December 1945. Clearly, residential real estate prices nationwide continue to be weak, and I doubt there will be sustained U.S. economic recovery without a rebound in housing values,” said Ken Winans, President of Winans International Investment Management & Research.
Winans had stated at the end of January, “Even with low mortgage rates, a nationwide recovery in housing will probably not happen in 2011. Past real estate bear markets ended when new housing inventory was below 5 months, and the median length of time to sell a new house declined to 4 months. It could easily take another year to dry up excess inventory and for mortgage credit to ease.”
The Winans International Real Estate Index (WIREI)™ is the only index that measures U.S. home prices from 1830 to present and posts new housing data without a 2-month lag found with other popular real estate indexes.
Tags: WIREI, new home prices, worse price decline, Depression, economic recovery, mortgage rates, bear market, housing inventory