WASHINGTON (Reuters) - U.S. single-family home prices fell for a fourth straight month in October pressured by a supply glut, home foreclosures and high unemployment, data from a closely watched survey showed on Tuesday.
The Standard & Poor‘s/Case-Shiller composite index of 20 metropolitan areas declined 1 percent in October from September on a seasonally adjusted basis, a much steeper drop than the 0.6 percent fall expected by economists.
The decline built on a revised decrease of 1 percent in September and took prices down 0.8 percent from year-ago levels. It was the first year-on-year drop in the index since January.
The housing market has been struggling since home-buyer tax credits expired earlier this year. To take advantage of the tax credits, buyers had to sign purchase contracts by April 30.
“The housing market had been heavily supported by the $8,000 first-time home-buyer tax credit and now, in absence of that credit, the market is paying back the demand that had been borrowed forward,” said Thomas Simons, an economist at Jefferies & Company in New York.
The U.S. unemployment rate rose to 9.8 percent in November, while the number of foreclosures is expected to top a million in 2010.
Sixteen of the 20 cities showed annual price declines in October and all 20 cities showed monthly price drops.
“The (housing) double dip is almost here, as six cities set new lows for the period since 2006 peaks. There is no good news in October’s report,” said David Blitzer, chairman of the index committee at S&P.
Unadjusted for seasonal impact, the 20-city index fell 1.3 percent in October after a 0.8 percent decline in September.
Financial markets largely shrugged on the news, as the data shows additional detail for October home prices, which have been reported from other sources.
Reporting by Corbett B. Daly; editing by Neil Stempleman