Home prices in 20 US metropolitan areas fell in February by the most on record, pointing to an imbalance between supply and demand that shows no sign of ending.
The S&P/Case-Shiller home-price index dropped 12.7 per cent from a year earlier, more than forecast and the most since the figures were first published in 2001. The gauge has fallen every month since January 2007.
Prices will probably keep sliding as foreclosures push even more properties onto the market just as stricter lending rules limit the number of qualified buyers. Shrinking home values have contributed to a slowdown in consumer spending that may already have tipped the economy into a recession.
"This is just one more strain for consumers, in addition to high energy prices and tight credit,'' said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, which forecast a price decline of 12.4 per cent. "Prices are going to continue to fall, probably through the end of next year."
Prices dropped 2.6 per cent in February from a month earlier, after a 2.4 per cent decline in January, the report showed. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month-to-month.
The index was forecast to drop 12 per cent following a 10.7 per cent drop in January, according to the median estimate of 14 economists surveyed by Bloomberg News. Estimates ranged from declines of 12.6 per cent to 11 percent.
The group's 10-city composite index, with a history back to 1987, fell 13.6 per cent in the 12 months ended in February, also the most ever.
Nineteen of the 20 cities in the index showed a year-over-year decrease in prices for February, led by a 23 per cent slump in Las Vegas and a 22 per cent decline in Miami. Charlotte was the only area showing a gain with a 1.5 per cent increase.
Bloomberg