The S&P/Case-Shiller Home Price Indices for the third quarter--released Tuesday--showed record declines in home prices.
Here are the details:
The decline in the S&P/Case-Shiller U.S. National Home Price Index –which covers all nine U.S. census divisions – remained in double digits, posting a record 16.6% decline in the third quarter of 2008 versus the third quarter of 2007. This has increased from the annual declines of 15.1% and 14.0%, reported for the 2nd and 1st quarters of the year, respectively.
The 10-City and 20-City Composites continue to set new records, with annual declines of 18.6% and 17.4%, respectively.
Despite the sharp drop, IHS Global Insight economist Patrick Newport expects these figures to go even lower from here:
The monthly S&P/Case-Shiller Home Price Indices are calculated using a three-month moving average, so this report measures house prices over July, August, and September when the economy was still on its feet. The real economy took a sharp turn for the worse towards the end of the third quarter. Making matters worse, financial markets fell into disarray in mid-September, after Lehman Brothers went bankrupt. So as bad as the latest Case-Shiller numbers appear to be, they are bound to get much worse.