Home Prices Fall To A Record Low Across the Nation

The housing market, which has been in a cool down mode for more than a year, is becoming downright cold.

Across the country, home prices have dropped to record lows. Compared to a year ago in January, single-family home prices in 10 major U.S. cities fell 11.4 percent.

Data released by the S&P/Case-Shiller composite index shows that no city is exempt from the national housing crisis. Las Vegas, Miami and Phoenix reported the biggest drops, with home prices falling by an average of 19 percent.

This is the first time since home price data were first collected in 1987 that both housing indexes have shown double-digit percentage decreases. All 20 cities tracked by the index have seen price drops for five months consecutively. Thirteen of the 20 cities reported their single largest monthly decline in January.

The housing slump spells bad news for the economy. As homeowners watch the equity in their homes vanish into thin air, they are less likely to spend money elsewhere. Â Mortgage delinquencies and foreclosures are increasing daily. Banks, still reeling from the subprime mortgage mess, have stepped back from mortgage lending as a whole.

The problems facing the housing industry are still being felt on Wall Street. When mortgage defaults and delinquencies on subprime mortgages began to skyrocket, it created a host of problems for the securities backed by subprime loans and similar derivative products. For investors, it means they are likely to see even more losses in the months ahead.

In late March, U.S. consumer confidence hit a five-year low, according to the Conference Board index, which gauges consumer spending.

Looking ahead, there appears to be little light at the end of the housing tunnel, as analysts predict that the plunge in home values - the worst since the Great Depression - could get even worse.

Says David Blitzer, chairman of the S&P’s index committee: “Unfortunately, it does not look like early 2008 is making any turnaround in the housing market after the declining year recorded throughout 2007. Home prices continue to fall, decelerate and reach record lows across the nation.”

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

This entry was posted on Tuesday, April 8th, 2008 at 12:21 pmand is filed under General Investor Information, Mortgage Backed Securities. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.