House prices are falling again—and the decline is accelerating.
Today’s big housing numbers comes from the Case-Shiller home price indexes. The indexes, which measure how prices have changed over the previous three months, show prices falling in every major metropolitan area (except, weirdly, Detroit). The 20-city average declined 3.3 percent from a year ago, and 1.1 percent from the previous three-month average.
This is the seventh successive month of widespread price declines.
The housing recovery began to stall last spring, after the government’s home-buyer tax credit expired. The three-month moving average of the Case-Shiller 20-city index showed that gains in home pricing slowing to a crawl in early summer and actually reversing in July and August. By September, it was clear that home prices were going into a serious decline.
The November numbers (which are actually the three-month average of September, October and November) showed a 1 percent decline over the previous month. Prices kept dropping by 1 percent in December and January.
February’s data shows that the decline is actually accelerating a bit.
This is the opposite of a recovery—it’s a crash building steam.
We’ve become almost passé about home price declines. A 3.3 percent year-over-year decline doesn’t seem all that shocking anymore. But prior to the recent housing crash, such a steep decline was unheard of.
The housing market is performing much worse than expected. In 2009, the Mortgage Bankers Association predict home prices would rise by 3 percent in 2011. Last year, the consensus among economists interviewed for the MacroMarkets LLC September survey was that home prices would fall by just 0.8 percent in 2011. A month ago, the economists were gloomier, estimating that housing prices would fall 1.38 percent by the end of the year. That estimate now looks overly optimistic.
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