US house prices fell at their fastest rate in more than two decades during the third quarter, according to a measure of house prices released on Tuesday and widely followed by investors according to the Financial Times.
The S&P/Case-Shiller index suggests that house prices nationwide fell 1.7 per cent in the three months to October from the second quarter and were down 4.5 per cent year on year. Prices in 20 big cities were down on average by 4.9 per cent year on year.
Meanwhile, two new reports painted a gloomy picture of continuing falls in house prices next year.
The US Conference of Mayors released a report by consulting firm Global Insight that forecast US house prices declining by 7 per cent nationwide next year with a 15 per cent decline in California, the nation’s biggest housing market.
The report warned that US cities, particularly in California and Florida, would suffer sharp falls in revenues from property taxes.
Goldman Sachs, meanwhile, released a report arguing that even if the US economy stayed out of recession, house prices would fall by 7 per cent in both 2008 and 2009, for a total decline from peak to trough of 15 per cent.
It warned that “if nominal house prices fall 15 per cent at the national level, parts of California, Florida, Arizona and Nevada are likely to see price declines of around 30 per cent”.
Read it here: US housing gloom Intensifies