U.S. Home Prices Still Going Down

BY Paul Solman and elizabeth shell  March 27, 2012 at 12:55 PM EDT

San Francisco skyline San Francisco saw one of the sharpest declines in home sales from December 2011 to January 2012, according to the S&P/Case-Shiller Home Price Indices. Photo by Chip Chipman/Bloomberg via Getty Images.

This post has been updated.

From their peak in July 2006, home prices have crashed 34 percent and the average U.S. home price is down to a level last seen around December 2002 and January 2003, according to a report released Tuesday morning by S&P/Case-Shiller.

The latest data show home prices were still down annually, although by less. Year over year for January 2012, the change in average prices (as compiled by the 20-city composite) was negative 3.8 percent – an improvement from December’s year over year change of negative 4.1 percent.

Month-over-month, this marks five months in a row of down prices, with the declines sharpest in Atlanta, Portland and San Francisco.

Making Sense

Looking at our home-selling price interactive, you can see what an average American home sold for in January 2012. It’s a level last seen almost a decade ago.

The average home’s selling price:

Prices not adjusted for inflation.

According to the report, the only bright spots month-over-month were Miami, Phoenix and Washington, D.C. While all three saw gains in home prices, no increase was higher than 0.9 percent. Eight major cities saw new lows from the peak in summer 2006, and a majority of cities had a negative one-year change.

In our Case-Shiller Home Price Index, which tracks the 20 cities as well as their composite score over time, Washington, D.C., stands out with the highest average home price, followed by Los Angeles and New York. Detroit continues to have the lowest home prices. (You can isolate a city by clicking Hide All and then clicking on that label.)

  • Due to data delays, there is no January 2012 index level for Charlotte, N.C., and it is therefore not included in the interactive.
  • Click and drag your mouse on the chart to zoom in on a particular span of time.
  • Use the box at top to choose your view: quarterly percent change, yearly percent change, monthly index value.
  • To view a particular city, click Hide All and then select the city’s label.

The Associated Press reports what we’ve been hearing for many months: “Homes are the most affordable they’ve been in decades. And mortgage rates are just above record lows….Conditions are improving for those in position to buy a home. Still, many people can’t afford to buy or are unable to qualify for mortgage. Some people in position to buy are holding off, worried that prices could fall even further.”

But remember, these are past numbers. Note, for example, Bloomberg’s story today about real estate bidding wars: Bidding Wars Erupt as U.S. Supply of Homes for Sale Falls.

Interactives by Justin Myers.

Editor’s Note: This post was updated to better reflect the change in home prices year over year from December to January.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions