Affordability and Strengthening Economy Restoring Price Stability to U.S. Housing Market

Price declines and low mortgage rates have resulted in dramatic improvement in housing affordability

--Ratio of monthly mortgage payment to median family income lowest on record; Monthly mortgage payment for a median-priced single-family home nearly 40 percent lower than at peak

Fiserv, Inc. today released an analysis of home price trends in more than 380 U.S. markets based on the Fiserv(R) Case-Shiller Indexes(R). The indexes are owned and generated by Fiserv, a leading global provider of financial services technology solutions, and data from the Federal Housing Finance Agency (FHFA).

The double-dip in home prices that started in 2010 continued to take home prices lower this spring and summer. Single-family home prices dropped 5.9 percent in 2011 second quarter compared to a year ago, according to the national Fiserv Case-Shiller home price indexes. Prices fell in 340 out of 384 metro areas, with 302 metros hitting new home price lows. Fiserv projects that home prices across the U.S. will decline another 3.6 percent by the second quarter of 2012, before rising by 2.4 percent by the second quarter of 2013.

Other highlights from the latest Fiserv Case-Shiller Indexes include:

-- Prices dropped by double-digits in 30 metro areas, while 25 metro areas had small price increases of 1 percent or more.

-- Projections for the following 12 months, i.e. the 2012 second quarter to 2013 second quarter period, illustrate why the housing market is poised to stabilize next year: home prices in 372 of the 384 markets are projected to rise in that time period, with only 12 markets expected to experience declines.

-- California and Florida have borne the brunt of the worst declines in home prices. Of the 33 markets where homes have lost at least 50 percent of their value since peak, 28 are in the Sunshine and Golden States.

-- In markets with the largest home price bubbles and crashes, improvements in housing affordability have been even larger. For example, the ratio of monthly mortgage payment to family income dropped from 32 percent (2006:Q1) to 11 percent in Las Vegas, from 42 percent (2007:Q1) to 19 percent in Miami, and from 59 percent (2007:Q2) to 27 percent in Los Angeles