Home prices plunge record 16.3 percent in July: S&P

A house sits for sale in North Aurora, Illinois July 24, 2008. REUTERS/Jeff Haynes

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 16.3 percent in July from a year earlier, extending declines that have plagued the housing market for two years, according to the Standard & Poor’s/Case-Shiller Home Price Indexes.

The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in July from June, S&P said in a statement on Tuesday. Since the peak of the housing boom in July 2006, the index has dropped 19.5 percent, it said.

S&P said its composite index of 10 metropolitan areas declined 1.1 percent in July for a 17.5 percent year-over-year drop. From two years ago, the index is down 21.1 percent.

The pace of home price declines since May has slowed to about a third of the rate of the two previous three-month periods, however, S&P said.

“There are signs of a slowdown in the rate of decline across the metro areas but no evidence of a bottom,” David Blitzer, chairman of S&P’s index committee, said in the statement.

Falling home prices resulting from soaring foreclosures are seen by economists as a top threat to the U.S. financial system and economic growth. A plan to remove up to $700 billion in bad mortgages from financial institutions failed to pass the U.S. House of Representatives on Monday, sending markets reeling.

Declines for Las Vegas, the weakest U.S. market, hit 29.9 percent from a year ago and 34.3 percent from its peak in August of 2006, S&P said. Annual declines for Phoenix and Miami for July hit 29.3 percent and 28.2 percent, respectively.

Markets in Atlanta, Boston, Dallas, Denver and Minneapolis showed the most evidence that a bottom has formed, with home price increases for the past three months or more, S&P said.

Reporting by Al Yoon; Editing by James Dalgleish