USA Today
NEW YORK (Reuters) — Prices of U.S. single-family homes were down a record 18.2% in November from a year earlier, indicative of a U.S. housing market that is still in the throes of a deep recession, according to the Standard & Poor’s/Case-Shiller 20-city housing index released Tuesday.
Separately, the Conference Board said Tuesday that its consumer confidence index edged lower in January to 37.7 from a revised 38.6 in December. That’s a historic low for the widely watched barometer, as shoppers worry about their jobs and watch the value of their homes and retirement funds dwindle.
Prices in the 20 metropolitan areas tracked by S&P fell 2.2% from October as housing continues to suffer from a huge supply of unsold homes, tighter lending standards and record foreclosures.
The drop in prices on a month-over-month basis was slightly steeper than expectations, based on a Reuters survey of economists. But the annual rate of decline for the Standard & Poor’s/Case-Shiller composite index for 20 cities was not as steep as economists had expected.
S&P said its composite index of 10 metropolitan areas also fell 2.2% in November from October for a 19.1% year-over-year drop, matching the previous month’s record decline.
Prices in 11 metro areas fell at record rates from a year earlier. Prices in 14 cities fell more than 10% from November 2007.
“The freefall in residential real estate continued through November 2008,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s.
“Since August 2006, the 10-city and 20-city composites have declined every month — a total of 28 consecutive months,” he said.
Prices in every region fell more than 1% from October. In eight metro areas, prices fell at a record monthly rate, Blitzer said.
Phoenix and Las Vegas were hardest hit in November, with prices down 3.4% and 3.3%, respectively. The two cities also have the worst returns over the one-year period, with prices falling 32.9% and 31.6%, respectively.
“Overall, more than half of the metro areas had record annual declines,” he said.
All 20 cities recorded monthly and annual declines in November.
As of November, average home prices are at similar levels to what they were in the first quarter of 2004. From their peak in mid-2006, the 10-city index is down 26.6% and the 20-city composite is down 25.1%.
The battered U.S. housing market is critical to the U.S. economy, with a wide-ranging impact from the construction industry to the sale of appliances and furniture. After hurting growth for multiple quarters, a continued deterioration could prolong a turnaround for the world’s largest economy, which has been in a recession since late 2007.
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