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Home Price Rise Smallest in 10 Years
Published January 31, 2007
NEW YORK -- Prices of single-family homes across the nation rose in November at the slowest rate in more than a decade, a housing index released Tuesday by Standard & Poor's showed, countering other evidence that the housing slowdown might be nearing an end.
The S&P/Case-Shiller composite index showed a 1.3 percent year-over-year increase in the price of a single-family home based on existing homes tracked over time in 10 metropolitan markets.
The last time the growth fell lower than 1.3 percent for the 10-city index was in September 1996, when it measured 1.2 percent.
For its 20-city composite index, prices grew 1.7 percent, the slowest rate ever for that data, according to the S&P index committee chairman, David Blitzer. The 20-city data have been collected since 2001.
"The weakness continues to spread," Blitzer said. "I don't see any signs of a bottom. Unfortunately, it's still looking pretty nasty from a housing point of view."
All cities in the survey except for Charlotte showed a decline in annual returns when compared to the previous month. Seven of the 20 cities are showing negative annual returns.
"Countrywide, home price declines appear to show no signs of slowing down," said Robert Shiller, chief economist at MacroMarkets LLC.
Shiller noted that the downward trend is seen nationally, while certain cities such as Boston and Detroit have done worse. Boston saw a 5 percent decline year over year, while prices dropped 4.5 percent in Detroit. San Diego witnessed a 3.3 percent drop.
Seattle, meanwhile, benefited from a strong jobs market in the Pacific Northwest. Home prices climbed 13 percent.
The median price of a new home sold in 2006 rose 1.8 percent, to $245,300. In 2005, there was a 9 percent price gain.
New-home sales fell in 2006 by the largest amount in 16 years, but they were up for a second straight month in December, adding to hopes that the worst of the housing slowdown might be over. But S&P said its data showed the end is not yet in sight.
The Federal Reserve has been closely watching the housing market as it tries to slow the economy's growth without pushing it into a recession. And in recent quarters economists had said the housing slump was creating a drag on the economy and pulling down gross domestic product growth.
Housing is expected to be a prominent topic of discussion in the two-day Federal Reserve meeting that began Tuesday as its interest-rate policy committee evaluates the effect of a housing market slowdown on the overall economy.