The Housing Market Continues to Struggle Across the Nation

Home prices fell again in January, making that the third consecutive month of price declines. This latest data shows that while many aspects of America's economy are improving, the housing market remains weak.

According to data released Wednesday, March 22nd by the Federal Housing Finance Agency, home prices fell 0.3% In January on a seasonally adjusted basis when compared to December 2010. That data was released in the FHFA's monthly home-price Index.

January's value on the FHFA's index was 186.5. An index value of 100 is comparable to the average home price in for January of 1991. The results for December 2010 were revised down to a 1.0% decline from the preliminary estimation of a 0.3% decline. The Federal Housing Finance Agency's index data is calculated by using the home prices of homes purchased by the government-controlled mortgage giants Fannie Mae and Freddie Mac.

Separate data released by the National Association of Realtors on Monday, March 21st shows that existing home sales for the month of February fell by 9.6% when compared to the previous month. The same report indicated that the median sales price was the lowest recorded since February 2002 with an average of $156,100.

Home prices are continuing to fall because of the large number of distressed and foreclosed homes for sale on the market. With so many distressed and foreclosed homes for sale, new and existing home sales will continue to struggle, lowering the median sales price across the nation. Instead of trying to compete with the low priced distressed and foreclosed homes, many sellers will try to wait out the supply. Buyers will also postpone the signing of contracts to see if they can obtain a better deal on the property by waiting for home prices to decline further.

Home prices are going to continue to decline or struggle as long as there are large inventories of distressed and foreclosed homes on the market. Once the inventories of these properties start to dwindle, we will likely see an increase and stabilization of home values.