House prices drop across 20 US cities
HOUSE PRICES in almost every US city fell over the last year, according to the Standard & Poor’s Case-Shiller index, out yesterday.
The 4.1 per cent decline in the year to July takes prices back to levels last seen in the summer of 2003.
The value of single-family homes fell in 18 of the 20 cities surveyed in the index. Worst hit was Minneapolis, where prices fell by 9.1 per cent. However, this is slower rate of decline than in the previous three months which each saw double-digit annual declines.
Detroit and Washington fared best with rises of 1.2 per cent and 0.3 per cent respectively.
Across the 20 cities which make up the index, prices were flat from June to July on a seasonally adjusted basis.
However, the figures for the month are slightly more positive than the annual change. Only 10 of the 20 cities experienced a decline in prices, with eight seeing increases and prices staying steady in the remaining two.
On an unadjusted basis, prices across the 20 cities increased by 0.1 per cent in the month.
However, analysts do next expect that modest increase to mark the start of a new positive trend.
“We still expect prices to fall back a bit later this year,” said Paul Dales, senior US economist at Capital Economics. “Prices lag changes in demand so have yet to fully reflect falling sales over the last six months.
“Also, with recent data suggesting that foreclosure filings jumped by as much as 30 per cent in August, it might not be long before an increase in the volume of distressed sales starts to weigh more heavily on prices again.”
US consumer confidence remained low in September, according to data out yesterday from the Confidence Board. Expectations of future earnings slid lower, “a sign that does not bode well for spending” said Board director Lynn Franco.