Home prices in 20 U.S. cities dropped more than forecast in August, highlighting one of the obstacles facing the economic recovery in its third year.
The S&P/Case-Shiller index of property values in 20 cities fell 3.8 percent from August 2010, the group said today in New York. The median forecast of 30 economists surveyed by Bloomberg News was for a 3.5 percent decline.
Recovering the 31 percent plunge in home prices from their 2006 peak will probably be years in the making as foreclosures throw more properties on the market and sales flag. Federal Reserve policy makers like William Dudley are among those that believe bolstering housing is among the “most pressing issues” facing the central bank.
And the second decrease in sales volume.
The housing market is yet to gain speed more than two years after the recession ended in June 2009. Sales of previously owned homes fell 3 percent in September from the prior month, according to the National Association of Realtors.
While Commerce Department data showed builders began work on more new houses last month, the gain was led by a surge in building of apartments and other multifamily dwellings as more Americans became renters.
Read it allThe drop in home values has pushed almost a quarter of U.S. mortgage borrowers underwater, meaning their debt is more than their homes are worth, according to CoreLogic Inc., a real estate data company in Santa Ana, California.