Survey finds U.S. home prices still sliding
Although a survey indicates that from July to August, monthly home sale prices edged up in half of the 20 U.S. cities measured, the future holds more price decline because of the number of foreclosures expected within the next year. This home is in Mount Lebanon, Pa. (Oct. 18, 2011) Credit: AP
A report on home prices out Tuesday has a sliver of good news against a huge shadow of bad news.
First the good news: Home prices rose in August over July in half of major U.S. cities, including the New York metro area, according to the private survey.
Then the bad: The increases weren't enough to keep the 20 city index from falling below expectations, Bloomberg News reported.
The S&P/Case-Shiller index of property values in 20 cities fell 3.8 percent from August 2010, the group said Tuesday in Manhattan. The median forecast of 30 economists surveyed by Bloomberg News was for a 3.5 percent decline.
The sliver of good news was that the index shows prices increased in August from July in 10 of the 20 cities tracked. That marked the fifth straight month that at least half of the cities in the survey showed gains.
The biggest price increases were in Washington, Chicago and Detroit. The greatest declines were in Atlanta and Los Angeles.
During the past 12 months, prices have fallen in all but two cities -- Detroit and Washington.
The dark side of the report is that analysts warn that prices are certain to fall again once banks resume millions of foreclosures that have been delayed because of a yearlong government investigation into mortgage lending practices.
Bloomberg News said that recovering the 31 percent plunge in home prices from their 2006 peak will probably be years in the making as foreclosures throw more properties on the market and sales flag. Federal Reserve policy makers like William Dudley are among those that believe bolstering housing is among the "most pressing issues" facing the central bank.
"Home prices will likely remain under pressure this fall and winter as more foreclosures and short sales come on the market," Anika Khan, an economist at Wells Fargo Securities Inc. in Charlotte, North Carolina, said before the report. "We do not expect prices to find a bottom until mid-2012."
