Home prices in 20 major U.S. cities fell 3.4 percent in October compared with the previous year, signaling continued weakness in the housing market, according to the S&P/Case-Shiller Home Price Indices.
The year-over-year decrease was within the 2.4 percent to 3.5 percent decline projected by analysts polled by Bloomberg.
Prices for the 20 major cities fell 1.2 percent compared with the previous month, with 19 of the 20 cities covered by the indices declining. Only Phoenix posted a positive monthly change of 0.3 percent compared with the previous month.
However, 14 of the cities saw improved annual returns for homeowners.
“In the October data, the only good news is some improvement in the annual rates of change in home prices, with 14 of 20 cities and both Composites seeing their annual rates of change improve, said David Blitzer, chairman of the Index Committee at S&P Indices, in a statement.
Atlanta had the lowest annual return, at negative 11.7 percent, while Washington D.C. had an annual return of 1.3 percent and Detroit had a positive annual return of 2.5 percent. Atlanta, along with Las Vegas, hit new pricing lows in October.
“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness. Atlanta was down 5 percent over the month, after having fallen by 5.9 percent in September. It also has the weakest annual return, down 11.7%, Blitzer said.
Home prices are equivalent to mid-2003 levels, having fallen nearly a third since the July 2006 peak. Despite record low interest rates and high affordability, Americans remain reluctant to buy homes in the face of an uncertain economy and continued price declines. In contrast, rentals apartments have done well, with low vacancy rates and rising rents.
“Some of the other housing statistics posted relatively healthy figures for November, but it seems that most of the good news was confined to the multifamily sector, said Blitzer. Existing home sales rose in November, but are still at a low annual rate of about 4 million. Single family housing starts also rose, but remain close to record lows and are still down about 1.5 percent versus October 2010.”