WASHINGTON - Home prices fell in most major cities for the second straight month, further evidence the housing recovery will be bumpy and weigh on the broader economy in 2012.
The Standard & Poor’s/Case-Shiller index, released yesterday, showed prices dropped in October from September in 19 of the 20 cities tracked.
Prices had risen modestly in April through August in at least half of the cities.
Home prices have fallen 32 percent nationwide since the housing bubble burst five years ago and are back to 2003 levels, according to the index.
Prices are even lower in hard-hit areas such as Atlanta, Cleveland, Detroit, Phoenix, and Las Vegas.
Washington, New York, Los Angeles, and San Diego have seen the smallest declines.
Home values remain depressed despite modest progress in the housing market.
Residential construction is likely to add to US economic growth in 2011, the first time that has happened in four years. That is mainly because apartments are being built almost twice as fast as two years ago - reflecting a surge in renting and weaker home sales.
The Case-Shiller index measures prices for roughly half of all US homes. Prices are compared with those in January 2000; the index is based on a three-month moving average. The monthly data are not seasonally adjusted.
Atlanta, Detroit, and Minneapolis posted the biggest monthly declines. Prices in Atlanta and Las Vegas fell to their lowest points since the housing crisis began. Prices rose in Phoenix after three straight monthly declines.
High unemployment and weak job growth have deterred many would-be buyers. Even the lowest mortgage rates in history have not been enough to lift sales.
Some people can’t qualify for loans or meet the higher down-payment requirements. Many with good credit and stable jobs are holding off because they think prices will keep falling.
Sales of previously occupied homes are barely ahead of 2008’s dismal figures - the worst in 13 years.
And sales of new homes this year will probably be the worst since the government began keeping records a half century ago.
Prices are likely to fall further once banks resume millions of foreclosures. They have been delayed because of a yearlong government investigation into mortgage lending practices.