By Mike Caggeso
Associate Editor
Money Morning
Home prices continued falling in December, setting another record negative pace and revisiting levels not seen since 2003, according to the S&P/Case-Shiller U.S. National Home Price Index.
Home prices in all 20 metro areas tracked by the index fell. Overall, prices plunged 2.5% in December from November. The slide is slightly worse than the 2.3% decline in the previous monthly period.
For the quarter, the national price index fell 18.2% compared to the fourth quarter of 2007 - the widest decline in the study's 21-year history.
Since peaking in the second quarter of 2006, average home prices are down 26.7%.
Home prices suffered double-digit declines in 18 of the 20 metro areas analyzed. Prices in 10 of those areas have tumbled more than 20%, and declines in Las Vegas, Miami, Phoenix and San Francisco have exceeded 40%.
"There are very few, if any, pockets of turnaround that one can see in the data," David M. Blitzer, Chairman of the Index committee at Standard & Poor's, said in a news release. "Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines."
The biggest quarterly drops occurred in Phoenix, Las Vegas and Minneapolis, where home prices fell 5.1%, 4.8% and 4.6% respectively.
For the year, home prices in Phoenix, Las Vegas and San Francisco fell the most, dropping 34.0%, 33.0% and 31.2% respectively. The year's best performing markets were Denver, Dallas and Cleveland, which posted home price declines of 4.0%, 4.3% and 6.1%.
President Barack Obama's administration pledged to spend $275 billion to help stabilize the housing market. The amount includes $75 billion to reel in mortgage rates.
"The massive inventory overhang in the market and the surge in foreclosures mean prices will continue to fall rapidly," Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, N.Y., said today in a note to clients, Bloomberg reported. "The administration's rescue plan will, in time, slow the rate of decline, but it won't happen immediately."
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