The record drop also marked the 23rd
consecutive month prices where price increases either slowed of declined,
according to the report. The previous record decline was 6.3 percent in April
“No matter how you look at these
data, it is obvious that the current state of the single-family housing market
remains grim,” Robert Shiller, who helped create the index, said in a
A broader index of 20 metropolitan areas
showed a price drop of 6.1 percent. Miami
posted the largest decline among those markets with home prices falling 12.4
percent in October compared to the same month last year.
Vegas, Phoenix and San Diego also posted double-digit
year-over-year declines, according to the Associated Press.
Home prices are likely to remain under pressure as the
recent rise in foreclosures puts even more homes on the market and tougher
lending rules add to the process of obtaining a home loan.
“With supply overhang enormous and mortgage financing tougher to
obtain, home prices are going to decline considerably further in the quarters
ahead,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a
New York forecasting firm, told Bloomberg.
Only three areas — Charlotte,
Ore. and Seattle
— posted year-over-year home price appreciation in October. Charlotte posted the largest gains at 4.3
Recent spikes in foreclosures and fears that homebuyers with
adjustable-rate loans have significant increases ahead in monthly payments are
also adding pressure to the housing sector. Mark Zandi of Moody’s Economy.com
told National Public Radio that the tally of foreclosures in 2007 will reach 750,000.
Looking forward, Zandi said, “I think we’re in store
for at least a million lost properties in ’08.”
Stocks were down in mid-day trading
Wednesday as jittery investors took in the new housing data and mulled troubles
in the retail sector.
International Council of Shopping Centers says its index of retail chain store
sales rose 2.8 percent last week, rounding out a sluggish December performance
that puts retailers on track for a smaller sales gain than the trade group
originally expected for the holiday shopping season.