As it does every month, Standard & Poor's released the readings for the S&P/Case-Shiller Home Price Indexes. Although the indexes have been around a while, lately they've been getting more attention as housing markets have plummeted.
The reading for September did not deviate from the trend—there were no bright spots in the report. The U.S. National Home Price Index, a quarterly index covering the nine U.S. census divisions, suffered its worst decline in its 21-year history when it fell 1.7% from the second quarter. It was also down 4.5% year-over-year, breaking the record low it set in the second quarter.
The monthly indexes were equally bleak. In addition to 10-city and 20-city composite indexes, an additional 20 indexes are calculated for select major metropolitan areas.
"Most of the metro areas continue to show declining or decelerating returns on both an annual and monthly basis. All 20 areas were in decline in September over August. Even the five metro areas that still have positive annual growth rates—Atlanta, Charlotte, Dallas, Portland and Seattle—show continued deceleration in returns," says Robert Shiller, chief economist at MacroMarkets LLC, and one of the creators of the indexes.
Those same five cities have consistently been among the strongest performers in recent months. However, the other end of the spectrum has been less stable. Detroit, consistently one of the worst performers, is down 9.6%, the same as San Diego. Detroit had dominated the lowest ranking until being overtaken by Tampa just last month. This month Miami joins the other Florida metro area: It is down 10% year-over-year, while Tampa is down 11.1%.
Not only did all 20 metropolitan areas show declines from the previous month, but eight of those metropolitan areas experienced record-low year-over-year returns: Atlanta (0.4%), Chicago (-2.5%), Las Vegas (-9.0%), Miami (-10.0%), Minneapolis (-4.5%), Phoenix (-8.8%), San Diego (-9.6%), Tampa (-11.1%) and Washington, D.C. (-6.6%).
The absence of positive signs in the latest home price index returns indicates we haven't seen the bottom of the trend, and raises the uncomfortable question of whether other areas of the economy may soon follow.
Written by Heather Bell