Home Prices Fall in Most U.S. Cities for Sixth Straight Month as Housing Struggles to Recover

U.S. Home Prices Drop for 6th Straight Month

April 24, 2012

AP - Home prices dropped in February in most major U.S. cities for a sixth straight month, a sign that modest sales gains haven't been enough to boost prices.

The Standard & Poor's/Case-Shiller home-price index shows that prices dropped in February from January in 16 of the 20 cities it tracks.

The steepest declines were in Atlanta, Chicago and Cleveland. Prices rose in Phoenix, San Diego and Miami. They were unchanged in Dallas.

The declines partly reflect typical offseason sales. The month-to-month prices aren't adjusted for seasonal factors.

Still, prices fell in 15 of the 20 cities in February compared with the same month in 2011. That indicates that the housing market remains far from healthy despite the best winter for sales in five years.

The steady price declines have brought the nationwide index to its late 2002 level. Home prices have fallen 35 percent since the housing bust.

Prices in nine cities fell to their lowest levels since the housing bust. The average price in Atlanta fell 17.3 percent in February compared with a year earlier. That's the biggest annual drop in the history of the index for any city.

Still, there were some positive signs in the report: Phoenix, one of the cities hit hardest by the housing bust, has seen five straight monthly gains. And most cities are reporting smaller annual declines than in previous months.

The S&P/Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.

Stan Humphries, chief economist for housing website Zillow.com, attributed the declines in part to heavy sales of foreclosed homes, which are usually sold at super-low prices. Foreclosures made up about one-fifth of February's sales.

"We think home sales will continue to trend upward, which ultimately will result in a slower rate of home value depreciation," Humphries said. "But any housing recovery will be dependent on job growth."

Job growth has slowed but is still occurring at faster pace than last year. Employers added an average of 212,000 jobs a month from January through March. That helped push down the unemployment rate to 8.2 percent from 9.1 percent last August.

Some recent reports suggest that the housing market is slowly improving.

January and February made up the best winter for sales of previously occupied homes in five years, when the housing crisis began. The 4.63 million annual sales pace in January was the highest since May 2010, the last month that buyers could qualify for a federal home-buying tax credit.

Builders are laying plans to construct more homes in 2012 than at any other point in past 3 1/2 years. More jobs and a better outlook among buyers could also make 2012 the first year since 2008 that construction adds to the U.S. economy.