Freddie Mac, State Figures Support Notion that More Housing Woes May Be on Horizon for Commonwealth HARRISBURG, Pa., May 16
HARRISBURG, Pa., May 16 /PRNewswire-USNewswire/ -- Recent trends in
housing prices in Pennsylvania suggest that larger declines lie ahead,
researchers at the Keystone Research Center in Harrisburg said today. And,
they added, those price declines, coupled with rising unemployment in the
state, raise the risk of additional mortgage delinquencies and home
foreclosures in Pennsylvania.
Responding to a release of national and state-level housing data by
Freddie Mac, Stephen Herzenberg, an economist with the Keystone Research
Center, said the Freddie Mac index for Pennsylvania reveals the first actual
decline in housing prices over a 12-month period since 1995. Pennsylvania
housing prices fell 1.3 percent between the first quarter of last year and the
first quarter of 2008, which is a smaller decline than experienced in 37
states, including five of Pennsylvania's nearest neighbors, Herzenberg noted.
"While housing prices have declined less here than in other states, the
trends we're seeing over time are following the national trend," Herzenberg
said. "Based on national projections, this implies that larger price declines
are in Pennsylvania's future."
Mark Price, a labor economist with the Keystone Research Center, pointed
to a summary of current housing market research delivered by Federal Reserve
Chair Ben Bernanke earlier this month. "Bernanke argued that rising
unemployment and falling home prices are important factors influencing the
prevalence of mortgage delinquency and foreclosure," Price said.
According to the Pennsylvania Department of Labor and Industry,
unemployment in Pennsylvania rose by 47,000 between April of last year and
April of 2008. "So now we have both of those conditions, and thus there is
greater risk today of an increase in mortgage delinquencies and foreclosures
than there was just a few months ago," Price said.
In January, the Keystone Research Center released the first detailed
analysis of the housing market in the commonwealth. A Building Storm: The
Housing Market and the Pennsylvania Economy cautioned that although the state
fared better than some surrounding states with regard to the collapse of the
housing bubble, there was still cause for concern.
"It seems like that is still the case," Herzenberg said.
For more information on the Pennsylvania housing market, visit
http://www.keystoneresearch.org/housingmarket/index.html.
The Keystone Research Center is a Harrisburg-based organization and
leading source of independent analysis of Pennsylvania's economy and public
policy. Much of KRC's research is available free of charge at
http://www.keystoneresearch.org.
SOURCE Keystone Research Center
