From the WSJ:
U.S. home prices dropped in September from a month earlier and the rate of decline showed signs of accelerating, according to the S&P Case-Shiller home-price indexes. Third-quarter prices were also down.
The indexes, based on the three-month averages of home prices, had fallen in August for the first time in four months, a delayed response to the housing-market weakness following the expiration of federal home-buyer tax credits in April.
The Case-Shiller index of 10 major metropolitan areas dipped 0.5% from August, while the 20-city index decreased 0.7%. Adjusted for seasonal factors, the declines were 0.7% and 0.8%, respectively.
For the third quarter, the S&P Case-Shiller U.S. National Home Price Index posted a 1.5% decrease from a year earlier. It declined 2% sequentially.
The economy continues to weigh on the housing market, along with the large supply of houses and “hidden” supply from delinquent mortgages, pending foreclosures or vacant homes, said David Blitzer, chairman of S&P’s index committee.
The prices of single-family homes in 20 major cities fell a non-seasonally adjusted 0.7% in September, according to the S&P/Case-Shiller home price index released Tuesday by Standard & Poor’s. Prices have moved up 0.6% in the past year, down from 1.7% in August. This is the fourth consecutive month where annual growth rates moderated from the prior month’s pace, confirming a “clear deceleration in home price returns,” S&P said. Home prices decreased in 18 of the 20 metropolitan areas tracked by Case-Shiller in September compared with August.
Real-estate prices in 20 U.S. cities probably rose in September at the slowest pace in eight months, showing the latest slump in sales is destabilizing housing, economists said before a report today.
The S&P/Case-Shiller index of property values climbed 1 percent from September 2009, the smallest year-over-year gain since February, when the market began to recover following a three-year drop, according to the median forecast of 28 economists surveyed by Bloomberg News. Other reports may show consumer confidence rose and businesses expanded.
The end of a government tax credit for homebuyers and unemployment hovering near 10 percent have led to a decrease in demand, delaying a recovery in the industry that precipitated the worst recession since the 1930s. Declining home values threaten to undermine the improvement in consumer confidence that is helping boost spending and accelerate economic growth.
“We’re in for more downward adjustment on home prices,” said Neil Dutta, an economist at Bank of America Merrill Lynch Global Research in New York. “People don’t want to buy a house when they think it’s going to lose value. A return to a normal housing market is going to be measured in years, not months.”
The S&P/Case-Shiller figures are due at 9 a.m. New York time. Survey estimates ranged from an increase of 1.6 percent to a decline of 3.4 percent, after a 1.7 percent gain in August.