Wednesday, May 25, 2011

U.S. House Prices Drop 2.5% In First Quarter Of This Year

According to the Federal Housing Finance Agency, which based their conclusion on mortgages acquired through Fannie Mae and Freddie Mac, house prices dropped 2.5% in the first quarter of this year.
"In many local real estate markets, particularly those hit hard by this cycle, foreclosures and other distressed properties are still a key factor in recorded and anticipated future sales and may be delaying price stability or recovery. Fortunately, serious delinquency rates also are declining," said FHFA Acting Director Edward DeMarco.
The Agency also made changes to its methodology that had the effect of lessening the decline: had the old methods been in place, the drop would have been 3%.

Gold, after dropping to $1,523 at 9 AM ET, had climbed up to $1,529 just before this item was released. Climbs and falls of the U.S. Dollar Index influenced the metal's own ups and downs. The release time saw gold on its way down to $1,526, and the greenback rising from slightly below 76.0 to just above 76.1. Evidently, the U.S. dollar market saw it as good for the greenback - perhaps because it induces more safe-haven demand - and gold reacted accordingly.

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