USA Today
NEW YORK (Reuters) — A closely watched index shows housing prices dropped in April from a year ago at the fastest rate ever, with prices tumbling to levels not seen in nearly four years, but the monthly pace of the decline showed some moderation.
The Standard & Poor’s/Case-Shiller home price index of 20 cities released Tuesday was down 15.3% in April from a year ago. That’s the largest drop since its inception in 2000. It was also the first time all 20 metro areas posted annual declines.
The index fell 1.4% in April from March.
The 20-city month-over-month decline was the smallest since August-September 2007.
The narrower 10-city index was down 16.3% in April from a year ago, biggest drop in its more than two-decade history. It slid 1.6% in April from March.
Prices nationwide are at levels not seen since August 2004.
The 10-city index has tumbled 19.1% since its June 2006 peak, and the 20-city index is down 17.8% from its peak in July 2006.
Meanwhile, a report from the Office of Federal Housing Enterprise Oversight said U.S. home prices fell 4.6% in April from the same month last year, when the index peaked.
The government index is calculated using mortgage loans of $417,000 or less.
While the government report has shown nationwide price declines, the Case-Shiller index has shown far greater drops because it focuses on larger cities where prices rose further during the boom years, and includes riskier loans.
Home prices in a dozen metro areas have fallen eight straight months.
“If there is anywhere to look for possible improvement, it would be that the pace of monthly declines has slowed down for most of the markets,” said David Blitzer, chairman of the Index Committee at S&P.
Still, 13 of the top 20 metro areas are posting record annual declines, and price losses are in double digits for half the areas, S&P said.
A slower pace of decline is encouraging, but “the bad news is that the price is still declining,” said Richard DeKaser, chief economist at National City in Cleveland.
“The potential is a vicious cycle, which we may already be experiencing. Falling home prices are leading to more foreclosures, which cause a further decline in prices,” he said.
Housing prices were weakest in Las Vegas and Miami, with prices down almost 27% over the year in each of those markets.
The losses reverse some of the largest gains registered during the housing boom, when house prices soared more than 53% in Las Vegas and 32% in Miami in 2004-2005, according to S&P.
In April, Miami and Phoenix were the worst performers, with prices falling more than 3%, S&P said.
House prices rose in eight of the 20 metro areas in April from March.
“There might be some regional pockets of improvement, but on an annual basis, the overall numbers continue to decline,” Blitzer said.
Charlotte and Dallas are the only two markets that have had two consecutive months of price gains.
“It’s going to be a slow process, but the less overblown markets will stabilize first and we’re getting a hint that that’s beginning to happen,” said Pierre Ellis, senior economist at Decision Economics. “Ultimately, with a very long lag, the serious bubble markets will settle down, too, but not in a time frame that is meaningful for markets now.”
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
WHY HOME PRICE INDEXES VARY |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Among the differences in the home price indexes: · The Standard & Poor’s/Case-Shiller nationwide housing index focuses on major metropolitan areas and includes expensive properties as well as cheaper ones. The S&P/Case-Shiller indexes use only purchase prices gathering information from county assessor and recorder offices. · The OFHEO Home Price Index, more national in its scope, excludes higher-priced homes and ones financed by riskier mortgages, and it includes refinance appraisals. The OFHEO index is calculated solely using home loans of $417,000 or less that are bought or backed by government-sponsored mortgage companies Fannie Mae and Freddie Mac. That excludes properties bought with some of the riskier varieties of home loans that have gone sour this year. · The National Association of Realtors uses a median price of a home sold. Many economists consider the OFHEO and Case-Shiller indexes to be better measurements of the housing market than the Realtors’ report, because both indexes examine price changes for the same properties over time instead of calculating a median price for houses sold during a particular month or quarter. Source: AP, OFHEO |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
