Prices of existing U.S. single-family homes in the third quarter slumped 4.5 percent from a year earlier, matching a record decline from the previous period as the housing downturn deepened, according to a national home price index Tuesday.
The S&P/Case-Shiller National Home Price Index fell 1.7 percent from June, marking the largest quarterly decline in the index's 21-year history, S&P said in a statement.
Robert Shiller, a Yale University economist and co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, on a Standard & Poor's teleconference following the release, said that at this point there is substantial concern and uncertainty about the outlook for the U.S. housing market.
"The downward momentum is looking impressive right now and at the very least ought to be a source of worry about the future for home prices," he said.
The futures market for the S&P Case-Shiller Composite Index is indicating home prices down another 5 percent in 2008, he said.
On the teleconference, titled "Current & Future State of U.S. Housing Market", Shiller said he is not able to predict the bottom for the U.S. housing market at this point of time.
"We do not know where it is going to go from here," he said. "I would hope that it would motivate people to start thinking about hedging their real estate risk."
The quarterly S&P/Case-Shiller index has been falling since the second quarter of 2006 as lenders clamp down on lending to risky borrowers who had depended on home price gains to keep their homes. Rising foreclosures are adding to soaring inventories of unsold homes, depressing prices further.
The composite month-over-month index of 20 metropolitan areas fell 0.9 percent to 195.62 in September from August, bringing the measure down 4.9 percent from a year earlier.
S&P said its older, composite month-over-month index of 10 metropolitan areas declined 0.9 percent in September to 212.65, for a 5.5 percent year-over-year drop.
Florida is the hardest hit state, with prices in the Tampa and Miami areas down 11.1 percent and 10 percent respectively over the past year, the indexes show. Home prices around San Diego, California, and economically depressed Detroit, Michigan declined by 9.6 percent over the 12-month period.
Lehman Brothers said the decline in home prices is the start of an extended decline in the market.
"We look for home prices to fall well into 2009 as excess inventory is slowly cleared and foreclosed homes return to the market at a discounted price," the company said in commentary published Tuesday.
This will translate to a 15 percent decline in national home prices from peak to trough, Lehman Brothers said.