Tuesday, November 25, 2008
Nov. 25 (Bloomberg) — House prices in 20 U.S. cities declined in the year ended in September at the fastest pace on record as rising foreclosures pushed down property values.
The S&P/Case-Shiller home-price index dropped 17.4 percent in September from a year earlier, more than forecast, after a 16.6 percent decline in August. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
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Mounting foreclosures are contributing to the drop in home prices, while adding to the inventory of unsold homes on the market. Lower property values are weighing on household wealth, causing consumers to cutback on spending and increasing the likelihood that the U.S. economy will contract for a second consecutive quarter.
“The onslaught of foreclosures hitting the market is certainly one reason prices are falling and will continue to fall,” said Guy LeBas, chief economist at Janney Montgomery Scott LLC in Philadelphia, who forecast a 17.1 percent drop. “We need to purge the excesses of the last several years, and the only way to do that is to suffer through these home price declines.”
This article was posted: Tuesday, November 25, 2008 at 10:03 am