US Median Home Prices at its Lowest Since 2004 due to Foreclosures

Homes were sold in the US last September at their lowest levels in four years due to the increase in inventories of repossessed properties. According to official numbers from the US Department of Commerce, the median price of single-family homes dropped to $218,400, which is 9 percent lower than last year’s price.

This was the lowest level in four years comparable to home prices before the start of the housing bubble that occurred a few years ago. That bubble burst as adjustable rates of subprime mortgages shifted higher and a flood of foreclosures suddenly swamped the nation.

A 12.6 percent drop in monthly sales last August led experts to predict a continuous drop in home sales in the succeeding months. In defiance to this prediction, home sales suddenly went up by 2.7 percent fueled by a 22.7 percent rise in sales in the west plus another increase in the south at 0.7 percent.

The increase was attributed to brisk sales of foreclosed homes in this region as investors and first-time homebuyers grabbed the lower price tags banks placed for these foreclosures. The West Coast states like Nevada and California were severely affected by the foreclosure crisis. These states registered the highest number of foreclosures in the country.

However, the opposite was true in other regions as the northeast registered a sharp decline in home sales at 21.4 percent. A similar decline in sales also registered in the Midwest with figures dropping by 5.8 percent.

Inventories for available homes in the sales market continue to climb at record highs as foreclosures across the country continue to claim homes from families who defaulted on their mortgages. September tallied at 394,000 as banks and lending institutions continue to unload repossessed houses back to the open housing market.

With the year coming to a close, banks and lending institutions wants these inventories off their books to minimize registered losses that could affect their stocks.

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• Foreclosed Home List Prices Fall, Numbers Rise in Arizona
• Subprime Mortgage Foreclosures Have Affected the Financial Meltdown
• Bank Owned Repossessed Homes in HSBC Books Dropping
• Housing Market Forecast Grim with more Foreclosures and Unemployment