United States: Home prices drop more than expected in September
November 30, 2010
In September, the S&P/Case-Shiller home price composite 20-city index fell for a second consecutive month, decreasing 0.7% over August on a non-seasonally adjusted basis (August: -0.2% month-on-month). The reading surprised the market on the downside, as analysts had anticipated prices falling only 0.2% over August. On an annual basis, home prices increased only 0.6% in September (August: +1.7% year-on-year), which represented the fourth consecutive month of moderating year-on-year price increases. Since the trough in April 2009, home prices have only recovered an accumulated 5.9% and still remain 28.6% below their July 2006 peak. September's weaker-than-expected reading reflected a sluggish housing market, which ?is running at less than half the pace needed to meet normal demand?, according to S&P. The weakness of this sector during the third quarter is corroborated by the 27.5% annualised drop over the previous quarter in residential fixed investment, according to national accounts figures from 23 November.