US home prices plunge 1.3% - in one month

Yes, there are some indicators that point to a stronger economy in 2011. Manufacturing, retail sales, fewer unemployment filings, and consumer confidence indicate that 2011 will be better than 2010 - which isn't saying much but is good news for millions looking for work.

Then there's the housing sector upon which a robust recovery depends. Here, the news is not nearly as good:

Home prices fell in the nation's major metropolitan areas from September to October, with six regions hitting new lows, and they're not expected to rebound anytime soon.

The Standard & Poor's/Case-Shiller index, long considered a reliable gauge of the housing market's health, reported Tuesday that prices of single-family homes dropped 1.3 percent in all 20 regions it tracks.
The housing market's collapse crippled the economy, and a recovery in home prices is considered critical to getting the market back on track. But many economists predict that home prices will continue to fall into the new year and possibly beyond.

Prices in Atlanta, Charlotte, Miami, Portland (Ore.), Seattle and Tampa fell to their lowest levels since home prices began deteriorating in 2006 and 2007, the index shows. The steepest drops took place in Atlanta, Detroit and Chicago, where prices declined 2.9 percent, 2.5 percent and 2 percent, respectively.

Rising home prices increases wealth. When people are richer, they spend more thus generating more economic activity. Conversely, falling home prices cause homeowners to pull in their horns and spend less. It's a simple equation whose arithmetic adds up to feeble growth and fewer jobs.



Yes, there are some indicators that point to a stronger economy in 2011. Manufacturing, retail sales, fewer unemployment filings, and consumer confidence indicate that 2011 will be better than 2010 - which isn't saying much but is good news for millions looking for work.

Then there's the housing sector upon which a robust recovery depends. Here, the news is not nearly as good:

Home prices fell in the nation's major metropolitan areas from September to October, with six regions hitting new lows, and they're not expected to rebound anytime soon.

The Standard & Poor's/Case-Shiller index, long considered a reliable gauge of the housing market's health, reported Tuesday that prices of single-family homes dropped 1.3 percent in all 20 regions it tracks.

The housing market's collapse crippled the economy, and a recovery in home prices is considered critical to getting the market back on track. But many economists predict that home prices will continue to fall into the new year and possibly beyond.

Prices in Atlanta, Charlotte, Miami, Portland (Ore.), Seattle and Tampa fell to their lowest levels since home prices began deteriorating in 2006 and 2007, the index shows. The steepest drops took place in Atlanta, Detroit and Chicago, where prices declined 2.9 percent, 2.5 percent and 2 percent, respectively.

Rising home prices increases wealth. When people are richer, they spend more thus generating more economic activity. Conversely, falling home prices cause homeowners to pull in their horns and spend less. It's a simple equation whose arithmetic adds up to feeble growth and fewer jobs.



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