During October, home prices declined 1.3% in the twenty largest metropolitan cities, according to statistics [.pdf] released today from S&P. The greatest decline occurred in Atlanta, where home prices fell 2.9%. All twenty of the largest metropolitan cities suffered a decline in October, with fifteen of the cities dropping 1.0% or more. These statistics clearly indicate a depreciating housing market. October marks the third consecutive month with a decline in US home values.
In addition to three straight months of declines, the rate of the declines have gradually gotten worse each month (-0.3% in August, -0.7% in September, & -1.3% in October). In other words, each drop has almost doubled the drop of the previous month.
Further, the 1.3% decline in October was the largest monthly decline since March 2009 [.xls]. Though, this 1.3% decline measures the twenty largest metropolitan cities altogether. After an analysis of each of the twenty cities, six of the twenty cities hit new lows during October that exceed the low levels during the Spring of 2009 (Atlanta, Charlotte, Miami, Portland, Seattle, & Tampa).
The graph below shows US home values from 1987 to present. Notice the current level is equal to the level during mid 2003. Also, since July 2006, when home prices peaked, there has been a 30% decline. Lastly, declining home values appear to be a trend, rather than mere coincidences. As discussed in the past, other aspects of the US economy exacerbate home prices, such as the unemployment rate leading to fewer buyers, the expiration of tax incentives to buy homes, increasing mortgage rates, as well as an ongoing flood of foreclosed homes saturating the supply of homes. Without hesitation, the worrisome trends within the housing sector threaten the US economy from recovering in the near future.