May 27, 2008
Prices of single-family homes declined a record 14.1 percent in the first quarter from a year earlier, marking a pace five times faster than the last housing recession, according to the Standard & Poor’s/Case Shiller national home price index reported on Tuesday.
A government report released Tuesday showed that sales of new single-family homes rose 3.3 percent in April but were down 42 percent from a year ago.
The S.&P./Case Shiller composite index of 20 metropolitan areas fell 2.2 percent in March from February and fell 14.4 percent from March 2007.
Economists expected prices for the 20-city index to fall 2.0 percent on month and 14 percent from a year earlier, according to a median in a Reuters survey.
“There are very few silver linings that one can see in the data,” David Blitzer, chairman of S.&P.’s index committee, said in a statement.
Falling home prices have become the scourge of the housing market that is seeing its worst downturn since the 1930s. Home values since last year have been dropping below balances owed on many mortgages, leaving borrowers with no equity and more likely to succumb to foreclosure.
The crisis in foreclosures, which pressure prices even lower, has spurred numerous plans by regulators and lawmakers that aim to keep borrowers in their homes by forgiving a portion of their loan’s principle.
Housing markets that grew the most during the housing boom, such as Las Vegas, Nevada and Miami, Florida, are leading the decline, S.&P. said.
S.&P. said its composite index of 10 metropolitan areas declined 2.4 percent in March, for a 15.3 percent year-over-year drop.
In a second closely watched gauge of house, sales of newly constructed single-family homes rose 3.3 percent in April to a 526,000 annual rate but they were down 42 percent from a year ago, which was the largest year-over-year drop in nearly 27 years, government data on Tuesday showed.
The Commerce Department estimate showed the first increase in new home sales since October, but the increase came after a big downward revision to the previous month.
Economists polled by Reuters were expecting new home sales to slip to a rate of 520,000. The department revised down its March estimate to a rate of 509,000 from 526,000, or a 11.0 percent decrease from a first-reported 8.5 percent decline.
The inventory of homes available for sale in April fell 2.4 percent to 456,000, which was the 12th straight monthly decline. The April sales pace put the supply of homes available for sale at 10.6 month’s worth.
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