After rising 4.7 percent in the second quarter, home prices in the US fell 2 percent in the third quarter of 2010 according to S&P/Case-Shiller data.
Prices have moved up 0.6 percent in the past year, down from 1.7 percent in August, making it the fourth consecutive month where annual growth rates moderated from the prior month’s pace, confirming a “clear deceleration in home price returns,” S&P said. Home prices decreased in 18 of the 20 metropolitan areas tracked by Case-Shiller in September compared with August
In September, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down; and only the two composites and five MSAs showed year-over-year gains. While housing prices are still above their spring 2009 lows, the end of the tax incentives and still active foreclosures appear to be weighing down the market.
“Another weak report; weaker than last month. The national index is down 1.5% from the third quarter of last year and 15 of 20 cities are down over the last 12 months. Other than Tampa, FL, there are no new lows this month but many analysts will argue that a double dip will be confirmed before Spring. While some of the bad numbers may reflect the end of the government’s tax incentive for first time home- buyers, there are other problems weighing on the housing market.” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.
“The national economy is certainly the number one issue for housing. Additionally, there is a large supply of houses on the market and further, hidden, supply due to delinquent mortgages, pending foreclosures or vacant homes. New construction is running at less than half the pace needed to meet normal demand, so a sustained recovery could be a ways off.”
“Looking deeper into the data, in the monthly indices, 18 MSAs and both Composites were down in September over August. This is worse than August when 15 were down month-to-month. The only two which weren’t down in September were Las Vegas, which managed to stay a touch above the low set in July, and Washington DC. Overall, there are few, if any, good numbers in this month’s data.”