House prices in 20 U.S. cities declined in the year ended in August at the fastest pace on record as more properties went into foreclosure before the credit crisis deepened this month.
The S&P/Case-Shiller home-price index dropped 16.6 percent in August from a year earlier, as forecast, after a 16.3 percent decline in July. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
The decrease in property values, which helped boost sales last month to the highest level of the year, will probably intensify in coming months as the latest tightening of credit markets threatens to dry up mortgage financing. Prolonged price declines may push even more houses into foreclosure, weakening consumer spending and the economy.
“House prices will remain on a downward trend for some time and until they are low enough to stimulate sufficient demand to clear the market,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said before the report. “Prices will need to fall further.”
Home prices decreased 1 percent in August from the prior month after declining 0.9 percent in July, the report showed. The figures aren’t adjusted for seasonal effects so economists prefer to focus on year-over-year changes instead of month-to- month.
From the IHT:
A closely watched index shows home prices tumbled by the sharpest annual rate ever in August.
The Standard & Poor’s/Case-Shiller 20-city housing index released Tuesday dropped a record 16.6 percent in August from the year-ago month, the largest drop since its inception in 2000. The 10-city index plunged 17.7 percent, its biggest decline in its 21-year history.
Both indices have recorded year-over-year declines for 20 consecutive months.
Prices in the 20-city index have plummeted more than 20 percent since peaking in July 2006. The 10-city index has fallen nearly 22 percent since its peak in June 2006.
No city in the Case-Shiller 20-city index saw annual price gains in August — for the fifth straight month.
Prices of U.S. single-family homes plunged a record 16.6 percent in August from a year earlier, according to the Standard & Poor’s/Case-Shiller Home Price Indices.
The composite index of 20 metropolitan areas fell 1.0 percent in August from July, S&P said in a statement on Tuesday.
S&P said its composite index of 10 metropolitan areas declined 1.1 percent in August from July for a 17.7 percent year-over-year drop, also a record.
Home prices in 20 major U.S. cities dropped 1% in August compared with July and had fallen a record 16.6% from the previous year, according to the Case-Shiller home price index published Tuesday by Standard & Poor’s. Prices have fallen in all 20 cities compared with a year ago. Only two of the 20 cities showed price gains in August: Boston and Cleveland. The largest declines in August were found in the San Francisco metro area, where prices fell 3.5%. In the past year, Phoenix and Las Vegas have had the largest declines, down nearly 31% in both cities.