Home prices tumble as consumer confidence sinks

By Joanne Morrison

WASHINGTON (Reuters) - Housing and credit troubles took more of a toll on the U.S. economy as prices on pre-owned single-family homes tumbled in the third quarter and consumer confidence in November sank to a two-year low, reports on Tuesday showed.

Home prices in the third quarter slumped 4.5 percent from a year earlier, matching a record decline from the previous period as the housing downturn deepened. The S&P/Case-Shiller National Home Price Index also fell 1.7 percent from June, marking the largest quarterly decline in the index's 21-year history, S&P said in a statement.

"Consistent with prior 2007 reports, there is no real positive news in today's data," Robert Shiller, chief economist at MacroMarkets LLC and creator of the indexes, said in the statement. All 20 metropolitan areas tracked by the indexes showed price drops or slower price appreciation, he said.

U.S. government securities and stock markets were reacting to separate news that nation's largest bank, Citigroup Inc., got a $7.5 billion cash injection with the sale of a 4.9 percent stake to Abu Dhabi Investment Authority, the world's largest sovereign wealth fund.

Prices on U.S. Treasury bonds fell on Tuesday, giving back some gains after the biggest rally in three years, and stocks were up.

Citigroup (C.N: Quote, Profile, Research) shares were up 0.6 percent at $29.98 with the deal that will give it fresh capital as it wrestles with the subprime mortgage crisis.

The Case-Shiller quarterly home price index has been falling since the second quarter of 2006 as lenders clamp down on lending to risky borrowers who had depended on home price gains to keep their homes. Rising foreclosures are adding to soaring inventories of unsold homes, depressing prices further.

Florida is the hardest hit state, with prices in the Tampa and Miami areas down 11.1 percent and 10 percent respectively over the past year, the indexes show. Home prices around San Diego, California, and economically depressed Detroit, Michigan declined by 9.6 percent over the 12-month period.