Home prices in a 20-city sample plunged 15.3% in April, on a year-over-year basis, according to the S&P / Case-Shiller U.S. National Home Price survey. In March, prices in the 20-city sample declined 14.4%.
Economists surveyed by Bloomberg News had expected home prices in the 20-city Case-Shiller survey to decline 16.0% in April on a year-over-year basis.
Economist Peter Dawson said that while he doesn't expect this latest housing data point to sway the U.S. Federal Reserve regarding interest rates ahead of its Wednesday 2:15 p.m. EDT announcement, the continued housing price decline will highlight the headwinds facing the U.S. economy. "The house price declines will underscore to the Fed that while oil is feeding inflation, significant economic drags remain, and housing is the biggest drag, so the Fed has to be concerned about the potential for a pronounced economic stall," Dawson said. "They have to be careful to not raise interest rates too quickly and choke-off a recovery."
Prices have now declined 17.8% from a peak recorded in 2006, and the index has fallen every month since January 2007.
Also, prices in a 10-city survey plummeted 16.3% in April.
Housing Analysis: Another horrible U.S. housing sector statistic, and the sector remains in deep recession. At this juncture, most economists agree that the U.S. housing sector is far from bottoming: some see the housing recession lasting through at least Q2 2009, while others say a recovery won't start until early 2010. In either event, it's going to be a while before the sector's high inventory levels are worked-off, a fact that suggests median home prices are likely to continue to decline for at least the next two quarters, and most likely, much longer.
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