U.S. home prices fell 2.8 percent in October from a year earlier, the Federal Housing Finance Agency said, as foreclosures continued to depress real estate values.
The slump was led by the regions that include Nevada and Arizona, and California and Washington, which both had a 5.5 percent decrease, the agency said today in a report from Washington. The region that includes Illinois and Ohio had the second-largest decline of 3.9 percent.
Home prices in October dropped 0.2 percent from the previous month on a seasonally adjusted basis, according to the FHFA. That was worse than economists’ projection of an increase of 0.2 percent, the average of 16 estimates in a Bloomberg survey.
The FHFA’s U.S. House Price Index is 19.2 percent below its April 2007 peak and about the same as the February 2004 level, according to the report.
U.S. home values probably will have their smallest decrease in four years in 2011 after the decline in property prices slowed, Zillow Inc. said today.
An increase in buyer demand is needed before property values can begin to recover, Zillow said. Low borrowing costs may be helping, with sales of existing homes rising in November to a 10-month high, according to a National Association of Realtors report yesterday.
“While homeowners suffered through another year of steep losses, the good news is that homes are losing value at a substantially slower pace as the market works its way towards the bottom,” Stan Humphries, Zillow’s chief economist, said in today’s statement.
While property values declined at a slower pace this year, an oversupply of homes for sale, low consumer confidence and an 8.6 percent unemployment rate will continue to weigh on the market and probably keep it from recovering until late next year or early 2013, Humphries said.