Home Prices' Steepest Drop in 21 Years

U.S. home prices declined 1.7% during Q3, and were down a full 4.5% from a year ago, according the S&P/Case-Shiller National Home Price Index released Tuesday. "The declines in the national figure are notable for two reasons," economist Robert J. Shiller said. "First, the third-quarter decline, at 1.7%, was the largest quarterly decline in the index's 21-year history. And, second, the year-over-year decline posted its second consecutive record low at -4.5%. Consistent with prior 2007 reports, there is no real positive news in today's data."

Homebuilder stocks were largely down in Tuesday trading. KB Home (KBH, -3.4%), D.R. Horton (DHI, -1.9%) and Pulte Homes (PHM, -1.3%) were among the losers, while NVR Inc. (NVR, +1.9%) bucked the trend. S&P Homebuilders ETF (XHB) was up 0.5% in midday trading.

Sources: S&P/Case-Shiller press release (.pdf)

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