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Home prices have shown few signs of any
turnaround, and a new report sees the downward
slide continuing.
On
Tuesday, Standard and Poor's said its nationwide
S&P/Case-Shiller Home Price Index fell 3.2
percent in the second quarter, compared with a
year ago. For the three months ended June 30,
prices dropped 0.9 percent from the first quarter.
Major
housing markets showed worse declines. The Case-Shiller
index covering 20 top metro areas for the month of
June fell 3.5 percent, and the 10-city index
dropped 4.1 percent year-over-year.
Latest
home prices for 149 markets from the National
Association of Realtors
"The
pullback in the
U.S. residential real estate market is showing no signs
of slowing down," Robert J. Shiller, Chief
Economist at MacroMarkets LLC said in a statement.
"The year-over-year decline reported in the
2nd quarter of 2007 for the National Home Price
Index is the lowest point in its reported history,
which dates back to January 1987."
The
slump in housing prices began in mid-2005 when
appreciation rates first started to slow and then
reverse. During the past few months a credit
crisis and a huge jump in default rates and
foreclosures contributed to market declines.
Defaulting
home owners have unleashed many new homes onto
already sizable inventories.
It’s the biggest glut of homes on the
market in about 16 years. There's
now a 9.6 month supply of homes on the market at
current rates of sale.
Demand
has fallen as home loans of all types have become
harder to obtain, taking many potential home
buyers off the market. First, it was subprime
borrowers who began having trouble arranging
financing. Then Alt-A mortgages (usually low- or
no-doc loans) dried up.
Lenders
have also tightened the screws on jumbo loans.
These big-ticket mortgages do not have a
guaranteed secondary market because they exceed
the dollar limits that of loans Freddie Mac and
Fannie Mae, the government sponsored agencies
created by Congress to add liquidity to housing
markets, will buy.
And,
even though prices have declined and demand eased,
affordability has improved only slightly during
the past year. Many sellers have stubbornly stuck
to listing prices suggested by the sales of
comparable homes a year or more ago, despite price
drops since. Overall, barely 43 percent of all
homes on the market are affordable to local
residents earning median household incomes, up
from 40.6 percent a year ago, according to the
National Association of Home Builders.
The mad
dash for housing help
Of the
metro areas in the 20-city Case-Shiller index,
only five have shown year-over-year price
increases, with
Seattle recording the highest rate of appreciation at 7.9
percent.
Charlotte
,
North Carolina
had a 6.8 percent rise and
Portland
,
Oregon returned 4.5 percent.
The
biggest year-over-year decline occurred in
Detroit where homes lost 11.0 percent of their value.
Other big losses were recorded by
Tampa
(-7.7 percent) and
San Diego (-7.3 percent).
Newsletter information courtesy of CNNMoney
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