U.S. home prices posted their steepest drop in 16 years, with 15 of 20 metropolitan areas experiencing a price drop over the past year, according to a Standard & Poor's report released Tuesday.
Standard & Poor's S&P/Case-Shiller home price index, a measure of U.S. home prices, revealed that the 10-city composite index dipped 4.5 percent in July from July 2006, and the 20-city composite index slipped 3.9 percent.
"The decline in home prices clearly continued into the summer months," says Robert J. Shiller, chief economist at MacroMarkets LLC. "The year-over-year decline reported for the 10-City Composite is the lowest since July 1991. The lowest annual decline in this Index, which dates back to January 1987, was -6.3 percent, which was reported in April 1991. The further deceleration in prices is still apparent across the majority of regions, with 16 of the 20 metro areas showing a drop in their annual growth rate from what was reported in June."
Patrick Newport, a economist for Global Insight, a Massachusetts-based economic and financial analysis firm, says the numbers were not much of a surprise considering the fact that Tuesday's National Association of Realtors existing home sales report showed that sales were at a five-year low.
"I think that the numbers are going to get a lot worse over the next three to four months," Newport told BUILDER Online.
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