More sophisticated measures that compare the prices of those properties when they are resold show similar trends. The S & P / Case-Shiller for 10 of the 20 largest U.S. metropolitan markets are still falling. The latest figures show a decline of almost 19% between March 2008 and March 2009. This one to one correlation in home values to the dow jones is explained in the neatest little guide to stock market investing and supported by several graphs that cover a ten year period. The Federal Finance Housing Agency, which tracks only sales of homes with loans issued or guaranteed by Fannie Mae and Freddie Mac, said prices in April fell 6.8% compared to last year.
The consequences of a further decline in the value of the property would be severe for the rest of the economy because it would significantly harm the American middle class and its army of consumers with conventional loans backed by Fannie or Freddie, called “in line” in industry jargon mortgages. Any appreciation in the price of the property that borrowers of subprime mortgages had already achieved evaporated. But about 8 million conventional mortgages were granted in 2005 and 2006. The value of the property has fallen since then.