Survey: Home Prices Make Biggest Drop in 16 Years
NEW YORK – The decline in U.S. home prices accelerated nationwide in July, posting the steepest drop in 16 years, according to the S&P/Case-Shiller home price index released Tuesday.
Home prices have fallen by more every month since the beginning of the year.
An index of 10 U.S. cities fell 4.5 percent in July from a year ago. That was the biggest drop since July 1991.
"The further deceleration in prices is still apparent across the majority of regions," MacroMarkets LLC Chief Economist Robert Shiller said in a statement.
A broader index of 20 cities fell 3.9 percent in July over last year, with 15 of 20 cities reporting that prices fell.
The five cities where prices are still rising — Atlanta, Charlotte, N.C., Dallas, Portland and Seattle — have reported growth is slowing in the past year. Atlanta and Dallas are close to moving into negative territory, S&P said.
Shiller, an economist at Yale University, told lawmakers in written comments last week that the loss of a boom mentality among consumers poses a "significant risk" of a recession within the next year.
His comments came a day after home buyers and other borrowers got some welcome news when the Federal Reserve cut a key interest rate by half a point to 4.75 percent. It was the Fed's first cut in four years.
The housing slowdown and decline in credit availability have triggered worries that the economy could go into a recession, spurring the Fed to act. Economists differ on whether the Fed will again cut rates during two meetings before year's end.