U.S. home prices across much of the country dropped again in October after drifting lower the month before, as the market continues to struggle with economic uncertainty, the latest S&P/Case-Shiller home price report showed.
Signs of a recovery, such as the temporary strength during the summer months, have proven to be seasonal, and housing values remain pressured by large inventories at a time when housing starts are at near record lows, the report said.
The 10-City and 20-City Composite Home Price Indexes in October dropped 1.1 percent and 1.2 percent, respectively, from their September readings. Year-over-year, prices are lower, but appear to be slowly climbing back toward parity. Still, both indexes remain about a third lower than their peak levels in mid-2006.
October saw prices slide relative to September in all but one city surveyed, and, again, home values nationally are still below where they were a year ago. Prices remain the lowest they’ve been since mid-2003.
“In the October data, the only good news is some improvement in the annual rates of change in home prices, with 14 of 20 cities and both composites seeing their annual rates of change improve,” S&P’s Chairman of Index Committee David Blitzer said in the report.
Year-Over-Year Glimmer Of Hope
October saw both the 10-City and the 20-City composites improve slightly on an annual basis, meaning that while they remain below their year-ago levels, that difference isn’t as deep as it was in earlier months.
The latest report pegs the 10-City composite at -3.0 percent from its October 2010 reading, with the 20-City sitting at -3.4 percent on the year.
What’s more, of the 20 cities surveyed, 14 showed improvement in the 12 months ended in October, even if only two of those cities are not in the red. In other words, home prices in Detroit and Washington D.C. are up 2.5 percent and 1.3 percent, respectively, on the year.
But the flip side is that five cities saw prices sink on an annual basis, with Atlanta now leading the pack of worst performing markets. Home prices there in October were 11.7 percent lower than they were in the year-earlier survey.
Miami was the only market where prices were unchanged year-over-year.
“Atlanta and the Midwest are regions that really stand out in terms of recent relative weakness,” Blitzer said. “Atlanta was down 5 percent over the month, after having fallen by 5.9 percent in September. It also has the weakest annual return.”
Summer Winners Losing Ground
Some of the strongest performing markets in the spring and summer months — Chicago, Cleveland, Detroit and Minneapolis – have seen any upward price momentum they had evaporate as the colder months progressed.
They each saw prices drop by at least 1 percent in October, compared to September readings. What’s more, in Cleveland and Detroit, for instance, home prices there are below their January 2000 levels, the report showed.
Other markets struggling to make a comeback include Atlanta and Las Vegas, both of which posted new lows in October, the report said.
Phoenix was the only market where prices were largely unchanged in October versus September, but overall home values there remain 5.1 percent below year-earlier levels.