US Home Prices Continue Record Declines in April
U.S. home prices extended their record slide in April, with every top metropolitan area now posting annual losses and many showing double-digit declines, according to the Standard & Poor's/Case Shiller home price index report on Tuesday.
However, the monthly pace of the decline showed some moderation.
The S&P/Case Shiller composite index of 20 metro areas fell 1.4 percent in April from March and slumped by a record 15.3 percent over the year.
Bigger declines of 2.0 percent in the month and 15.9 percent from April 2007 had been expected for the 20-city index, according to the median forecast of economists polled by Reuters.
The 20-city month-over-month decline was the smallest drop since the August-September 2007 period.
S&P said its composite index of 10 metro areas slid 1.6 percent in April for a record 16.3 percent annual drop.
Home prices in a dozen of the metro areas have fallen for eight straight months.
"If there is anywhere to look for possible improvement, it would be that the pace of monthly declines has slowed down for most of the markets," David Blitzer, chairman of the Index Committee at S&P, said in a statement.
Still, 13 of the top 20 metro areas are posting record annual declines and price losses are in the double digits for half of the areas, S&P said.
The peak in the indexes was reached two years ago. The 10-city index has tumbled 19.1 percent since June 2006 and the 20-city index dropped 17.8 percent from July 2006.
A slower pace of decline is encouraging, but "the bad news is that the price is still declining," said Richard DeKaser, chief economist at National City in Cleveland.
"The potential is a vicious cycle which we may already be experiencing. Falling home prices are leading to more foreclosures, which cause a further decline in prices," he added.
Housing prices were weakest in Las Vegas and Miami, with prices down almost 27 percent over the year in each of those markets.
The losses reverse some of the largest gains registered during the housing boom, when house prices soared more than 53 percent in Las Vegas and 32 percent in Miami in the 2004-2005 period, according to S&P.
In April, Miami and Phoenix were the worst performers, with prices falling more than 3 percent in each market, S&P said.
House prices rose in eight of the 20 metro areas in April from March.
"There might be some regional pockets of improvement, but on an annual basis the overall numbers continue to decline," Blitzer said.
Charlotte, North Carolina, and Dallas are the only two markets that have had two consecutive months of price gains.
"It's going to be a slow process, but the less overblown markets will stabilize first and we're getting a hint that that's beginning to happen," said Pierre Ellis, senior economist at Decision Economics. "Ultimately, with a very long lag, the serious bubble markets will settle down, too, but not in a time frame that is meaningful for markets now."