Housing Prices Drop 8.4%, Setting New Record
U.S. home prices in 10 major metropolitan areas fell by a record 8.4 percent in the year through November, Standard & Poor's said Tuesday.
The decline in the S&P/Case-Shiller Home Price Index topped the 6.7 percent annual drop for October and was deeper than the 7.1 percent consensus as reported by economists at Goldman Sachs Group.
Home prices across big cities have now declined for 11 consecutive months and show little sign of bottoming, Robert Shiller, a founder of the index and chief economist at MacroMarkets, said in a statement.
"We reached another grim milestone in the housing market in November," Shiller said.
Falling U.S. home prices in the past year have fueled rising delinquencies and foreclosures as homeowners are unable to get out of costly loans.
The broader but younger index of 20 cities recorded an annual decline of 7.7 percent in November, S&P said. Drops in the indexes were led by prices in Miami, Florida and San Diego, California, which posted annual declines of 15.1 percent and 13.4 percent, respectively.
Study Finds Houses Still to Pricey
Despite the weakness in home prices, a study has found that homeownership still remains out of reach for many people.
The study, which was commissioned by the Center for Housing Policy, found that registered nurses, retail salespersons, customer service representatives, food preparation workers and office clerks do not have the median annual income to afford their own home in most of the 201 metro regions studied.
Those jobs are the five highest-growth occupations in the country.
"We hear a lot about the 'information economy,' but the fact is most working families are still employed in traditional service occupations," Jeffrey Lubell, executive director of the center, said in a statement. "In many metro areas, these families continue to face home prices and rents that are beyond their means."
Recently, some of the the most expensive markets in California, Arizona, Florida and around Washington, DC, have seen an increase in affordability but those areas are still out of reach for many working people, the study finds.
One of the biggest causes of the affordability gap is a severe deficit of affordable housing stock, said Barbara Lipman, research director for the Center.
"The solution is going to be increasing the supply of homes," she said. "We have been moving sideways for a couple of years in terms of available affordable housing. We have barely replaced the stock of available homes for years now."