Economic News

U.S. home prices have fallen 34.4% since the recession hit

Home prices continue to slide, with the average home having lost a third of its value since the recession hit. January marks the fifth consecutive month of home prices falling across the nation.

Home price index for January

According to the S&P/Case-Shiller Home Price Index (HPI) report released today, home prices fell for the fifth month in a row this January, dropping to their lowest level in nearly a decade. Prices have plummeted 34.4 percent from the pre-recession housing peak in July 2006 and in January, seven of the cities were down by 1.0 percent or more over the month.

In January, the average home lost 0.8 percent of its value from December and 3.8 percent from January 2011. Although this HPI report only studies 20 major markets, it is widely recognized as a reliable housing indicator. The 10-City Composite was down 3.9 percent and the 20-City was down 3.8 percent compared to January 2011.

“Despite some positive economic signs, home prices continued to drop,” said David M. Blitzer, Chairman of the Index Committee at S&P Indices. “The 10- and 20- City Composites and eight cities – Atlanta, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa – made new lows.”

Blitzer noted that having suffered “massive price declines,” Phoenix and Detroit saw a price increase over the year, along with Denver. Although those three areas are improving, Blitzer points to Atlanta as continuing to “stand out in terms of recent relative weakness. It was down 2.1% over the month, and has fallen by a cumulative 19.7% over the last six months. It also posted the worst annual return, down 14.8%.”

This month, reporting was incomplete, which is quite rare. “Due to delays in reporting for Mecklenburg County, we did not publish a January index level for Charlotte, North Carolina. There was not enough January data to publish an accurate index level this month. We are not sure of the reasons for the delays, but do expect to see the data with next month’s release. We did include data we received from Gaston County, NC, and York County, SC, in the calculation of the 20-City Composite.”


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