Existing homes across the country became even more affordable in March, according to a leading indicator that is down by more than 32% from the market’s peak in the second quarter of 2006.
The Standard & Poor’s/Case-Shiller National Housing Index, which covers all nine of the country’s Census regions, rested at 128.81 in March, or 19.1% below the Index for the same month a year earlier. The Composite House Price Index for the 20 largest metro markets in the U.S. declined to 139.99 in March, down 2.2% from February and 18.7% from March 2008. A survey of 23 economists had expected an 18.4% year-over-year decline in the 20-city composite for March, according to Bloomberg News.
All 20 markets showed house price declines in March. Minneapolis’ composite index, 109.12, was 6.1% below February, representing the single biggest monthly fallout for any metro area in the Index’s 21-year history.
The steepest year-to-year decreases occurred in markets where unsold existing homes and foreclosures remain high. For example, the biggest dip in March could be found in Phoenix, whose composite index of 106.83 was 36% below its March 2008 level, and 53% down from its peak in June 2006. Las Vegas’ composite index in March, 116.44, fell by 31.2%. Surprisingly, San Francisco ranked third, as its composite price index for existing homes declined by 30.1% to 117.77.
Conversely, pricing in some markets—such as Boston, Charlotte, N.C., Denver, and Cleveland, whose indices declined by only single digit percentages—have held up relatively well. The composite index for Dallas, at 112.38 in March, was flat from February and down only 11.1% from its peak in June 2007.
However, as long as unsold inventory levels remain high, house prices are likely to soften further. During the BUILDER 100 conference in Chicago a few weeks ago, Yale professor Robert Shiller, who assembles the data for the Index with Wellesley College professor Karl Case, said the Index predicted another 13% decline in house prices through the next year.
John Caulfield is a senior editor with BUILDER magazine.
Learn more about markets featured in this article: Charlotte, NC.