Home Prices Show Unexpected Fall in November
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Data from S&P/CaseShiller today showed a large drop in home prices during the month of November -- possibly a sign of the fragility that the recovery in the US housing market is facing.
The S&P composite index that covers 20 metropolitan areas showed a 0.2 percent drop in home prices from October to November. Economists had expected a 0.1 percent rise for the month. On a seasonally-adjusted basis, the index rose 0.2 percent. When factoring in a revised 0.1 percent drop from October, the annual decline in home prices was 5.3 percent. On a more optimistic note, however, annual declines in home prices have improved sequentially for the last 10 months.
Only five of the cities covered in the index showed a rise from October to November: Phoenix led with a 1.1 percent jump, Los Angeles was just behind at 0.8 percent, San Francisco was up 0.6 percent, home prices in San Diego rose 0.4 percent and Portland saw a 0.3 percent rise. Miami and Dallas were unchanged. Chicago showed the largest drop in monthly home prices with a 1.1 percent decline.
The 10-city index fell 0.2 percent in November, or 4.5 percent annually, while remaining unchanged for October.
The housing market crash has caused a decline in home prices to levels not seen since 2003; from the peak set in mid-2006, the 20-city index is down 29.2 percent while the 10-city index is down 30 percent since that time.
Moving forward, the expiration of home buyer incentives given by the government could negatively impact housing prices. The first-time home buyer tax credit is set to end on April 30.
The S&P composite index that covers 20 metropolitan areas showed a 0.2 percent drop in home prices from October to November. Economists had expected a 0.1 percent rise for the month. On a seasonally-adjusted basis, the index rose 0.2 percent. When factoring in a revised 0.1 percent drop from October, the annual decline in home prices was 5.3 percent. On a more optimistic note, however, annual declines in home prices have improved sequentially for the last 10 months.
Only five of the cities covered in the index showed a rise from October to November: Phoenix led with a 1.1 percent jump, Los Angeles was just behind at 0.8 percent, San Francisco was up 0.6 percent, home prices in San Diego rose 0.4 percent and Portland saw a 0.3 percent rise. Miami and Dallas were unchanged. Chicago showed the largest drop in monthly home prices with a 1.1 percent decline.
The 10-city index fell 0.2 percent in November, or 4.5 percent annually, while remaining unchanged for October.
The housing market crash has caused a decline in home prices to levels not seen since 2003; from the peak set in mid-2006, the 20-city index is down 29.2 percent while the 10-city index is down 30 percent since that time.
Moving forward, the expiration of home buyer incentives given by the government could negatively impact housing prices. The first-time home buyer tax credit is set to end on April 30.
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