U.S. home prices in many cities drifted lower in September, struggling to find the footing to stage a recovery amid a continued economic weakness, the latest S&P/Case Shiller report showed.
Earlier this year, the housing market retested lows not seen since the market bottomed in early 2009, then bounced just enough to allude to a potential recovery.
But as the months progressed, it has become clearer that a housing recovery is elusive at best, and any strength seen in recent months has been merely a result of seasonal factors that tend to boost demand for housing during the summer.
The 10-City and 20-City Composite Home Price Indexes in September dropped 3.3 percent and 3.6 percent from their September 2010 readings, respectively, and prices in all but two cities surveyed remained below year-ago levels.
All in all, the market remains mired by sluggish demand, high unemployment rates, large inventory of homes and tight availability of credit, with prices across the U.S. largely back to where they were in early 2003.
“Over the last year, home prices in most cities drifted lower,” S&P Chairman of the Index Committee David Blitzer said in the report. “It is disturbing that we saw three cities post new crisis lows.”
“The plunging collapse of prices seen in 2007-2009 seems to be behind us,” Blitzer added. “Any chance for a sustained recovery will probably need a stronger economy.”
A Closer Look
As noted, homes in all but two cities surveyed were still cheaper than year-ago levels.
While Washington, D.C. and Detroit saw prices climb 1 percent and 3.7 percent on the year, respectively, the other 18 cities tracked in the data series remained in the red, and some of them slid to new lows.
Still, there were roses among the thorns. In as many as 14 cities, the hole seemed to be getting shallower, with prices managing to improve a notch while still remaining lower on the year, Blitzer noted.
The latest data series also included a quarterly survey, which showed the U.S. National Home Price Index was nearly 4 percent below year-ago levels despite its 0.1 percent gains in the third quarter, compared with its previous quarter. The quarterly survey covers all nine U.S. census divisions.
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