Home Price Declines in 20 US Cities Eased

2009 June 30

June 30 2009 - Home prices in 20 major U.S. metropolitan areas fell in April at a slower pace than forecast, a sign the plunge in real-estate values is abating.

The S&P/Case-Shiller home-price index decreased 18.1 percent from a year earlier following an 18.7 percent drop in March. The measure declined 19 percent in January, the most since the data began in 2001.

Price declines are likely to keep moderating as demand steadies and distressed properties account for a smaller share of transactions. Still, the highest jobless rate in 25 years is contributing to record foreclosures, which are likely to keep depressing values for months to come even as home sales steady.

“It is looking a little bit better,” said Mark Vitner, a senior economist at Wachovia Corp. in Charlotte, North Carolina. “The largest declines are probably past. When prices stop falling the erosion in household wealth will come to an end.”

Economists forecast the index would drop 18.6 percent, according to the estimates of 33 economists surveyed by Bloomberg. Estimates ranged from drops of 17.7 percent to 19.4 percent.

Stock futures extended gains following the report. The contract on the S&P 500 index was up 0.2 percent at 9:19 a.m. in New York.

The home-price index figures aren’t adjusted for seasonal effects so economists prefer to focus on year-over-year changes instead of month-to-month.

Home-Price Declines in 20 U.S. Cities Eased in April

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