The price of single-family homes fell 18 percent in October from a year earlier, according to the closely watched Standard & Poor’s/Case Shiller Housing Index. All 20 cities reported annual price declines in October; prices in 14 of the 20 metropolitan areas surveyed fell at a record rate reports the New York Times.
“The bear market continues; home prices are back to their March, 2004 levels.” David M. Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement. The 10-city index dropped 19.1 percent, its largest decline in its 21-year history.
The Case-Shiller numbers were the latest round of bleak news for the housing market, which is at the center of the country’s broader economic troubles. Foreclosures, bad loans and collapsing housing prices contributed to the financial crisis earlier this year, and now, the widening recession is dragging housing down even farther.
Last week, the National Association of Realtors reported that sales of previously owned homes, which dominate the market, fell to the lowest pace in years. Home values tumbled 13 percent in November from a year earlier, the sharpest drop in more than 40 years.
A glut of unsold houses is weighing down the market, and housing is likely to deteriorate further in 2009 as the jobs picture continues to weaken. Unemployment is now at 6.7 percent, its highest point in a decade, and economists predict it will rise to 8 or 10 percent next year.
“People who think they’re going to lose their job don’t buy a home,” Steven Ricchiuto, chief economist at Mizuho Securities, said.