Housing Affordability Being Restored In Many Markets

Fiserv, Inc (NASDAQ: FISV), today released an analysis of home price trends in more than 375 U.S. markets based on the Fiserv Case-Shiller Home Price Index, which is owned and generated by Fiserv, and data from FHFA, the Federal Housing Finance Agency.

The U.S. housing market continues its price correction, with single-family home prices across the U.S. falling 19 percent over the 12-month period ending March 31, 2009. On average, compared to family income, U.S. home prices at the end of the 2009 first quarter were just 7 percent above the levels of early 2000, at the start of the real estate bubble. In about 10 percent of U.S. metro markets, home prices, relative to income, are now lower than they were prior to the bubble. In Los Angeles, for example, home prices more than doubled relative to income between 2000 and 2006. Currently, homes in the Los Angeles market are only 25% more expensive than they were in 2000, representing a closer return to pre-bubble levels and a substantial improvement in affordability.

"The Fiserv Case-Shiller Home Price Index numbers continued to show falling home values in sand states such as California and Florida," said David Stiff, chief economist, Fiserv. "But there is a silver lining in the cloud of rapidly falling prices. Housing affordability is quickly being restored in many markets and the pool of buyers who can afford to purchase homes is increasing at a rate not seen in recent years, setting the stage for home price stabilization."

"Over the next year, Fiserv forecasts that national home prices will drop another 11 percent, and bottom out in early 2010," Stiff continued. "While affordability has been or will shortly be restored in most markets, it must be noted that the recovery in home prices will be tentative and weak. Even with lower prices, potential home buyers who have not lost their jobs may lack the confidence to buy a home when the economy is performing so badly. Even those who are confident their jobs are secure may not have access to mortgage credit. Further, even as housing demand improves there will be a large overhang of foreclosed properties that will continue to be a drag on prices."

Home price declines remained sharp across California, Arizona and Florida, while other metro areas showed smaller declines and are better positioned for recovery.

Observations from the data include:
- One-time bubble markets in Florida, California and Arizona, which have already seen home values fall 40 percent to 50 percent since prices peaked in 2006, are showing no sign of moderation in declining prices. In San Jose, for example, average home prices declined 31 percent over the past year, and are projected to fall another 12 percent over the next year. In Tucson, Arizona, average home prices declined almost 20 percent over the past year. Similarly, the Orlando, Florida market saw a decline of just over 29 percent in home values over the past year, with a projected decline of another 26 percent over the next year.

The Fiserv Case-Shiller Home Price Indexes, which include data covering thousands of zip codes, counties, metro areas and state markets, are owned and generated by Fiserv. The historical and forecast home price trend information in this report is calculated with Fiserv's proprietary Case-Shiller indexes, supplemented with data from the FHFA. The historical home price trends highlighted in this release are for the 12-month period that ended March 31, 2009. One-year forecasts are for the 12 months ending on March 31, 2010.

Nationally, home prices have fallen just over 19 percent over the past year, leaving the median price at $167,300. The median monthly mortgage payment in the 2009 first-quarter dropped to 14%.