U.S. home price drop will signal rise in sales in 2011: Freddie Mac

None of the nine regions covered nationally avoided a drop in purchase price. Over the previous quarter, prices were down 2.6%.

“Low mortgage rates and home prices have combined to push homebuyer affordability to levels not seen in decades in most places,” said Frank Nothaft, chief economist with Freddie Mac. “This high affordability will likely translate into an increase in 2011 homes sales relative to last year.”

Foreclosed property and short sales continue to saturate the market, said Frank Nothaft. But he said new foreclosures were gradually slowing going forward.

Along the Pacific Ocean, in the states of Alaska, California, Hawaii, Oregon and Washington showed the biggest drop.

Prices there are down 26.7% over the past five years and have fallen 6.3% in the past year, said Freddie Mac.

The mid-Atlantic states of New Jersey, New York, and Pennsylvania, home values showed the smallest drop, down 1.7% in the past year, and down 0.6% in the past five years.

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