U.S. house prices tumbled nearly 19 percent in February but for the first time in 16 months the fall did not set a new record, suggesting the housing market might be closer to a bottom.
The Standard & Poor's/Case-Shiller Home Price Indices released on Tuesday showed prices of U.S. single-family homes fell 18.6 percent in February from a year earlier.
The U.S. housing market is in its worst crisis since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down prices.
Many potential home buyers have been staying sidelined, awaiting for the precipitous drop in prices to mitigate and for the economy to stabilize.
The composite index of 20 metropolitan areas fell 2.2 percent in February from January, S&P said in a statement. The drop month-over-month was slightly sharper than expectations based on a Reuters survey of economists, but was better than expected on a year-over-year basis. The 20-city index dates back to 2000.
S&P said its index of 10 metropolitan areas declined 2.1 percent in February from January for an 18.8 percent year-over-year drop. The 10-city index dates to 1988.
For the first time in 16 months, the annual decline of the 10-city and 20-city composites did not set a record.
While the declines in residential real estate continued into February, we witnessed some deceleration in the rate of decline in some of the markets, David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement.
The breakdown, however, was still grim. Of the 20 metro areas, all recorded price drops on a month-on-month and year-on-year basis. Ten areas showed record rates of annual decline.
And historically, compared with their peaks in mid-2006, the 10-city index is down 31.6 percent and the 20-city index is down 30.7 percent. As of February, average home prices across the United States are at levels similar to where they were in the third quarter of 2003.
The battered U.S. housing market is critical to the U.S. economy, with a wide-ranging impact from the construction industry to the sale of appliances and furniture. After hurting growth for multiple quarters, a continued deterioration could prolong a turnaround for the world's largest economy, which has been in a recession since late 2007.
(Editing by Chizu Nomiyama)