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Empresas y finanzas

U.S. home prices plunge record 18 percent in October


    By Julie Haviv

    NEW YORK (Reuters) - Prices of U.S. single-family homes in October plunged a record 18.0 percent from a year earlier, according to the Standard & Poor's/Case-Shiller Home Price Indices released on Tuesday that indicated a U.S. housing market in the throes of a deep recession.

    The battered U.S. housing market is critical to the U.S. economy, with a wide-ranging impact from the construction industry to the sale of appliances and furniture. After hurting economic growth for multiple quarters, a continued deterioration could prolong a turnaround for the world's largest economy, which has been in a recession since late last year.

    The composite index of 20 metropolitan areas fell 2.2 percent in October from September. The price drops, both on a year-over-year and month-over-month basis, came in worse than expectations based on a Reuters survey of economists.

    S&P said its composite index of 10 metropolitan areas declined 2.1 percent in October from September for a 19.1 percent year-over-year drop, also a record.

    "The bear market continues; home prices are back to their March, 2004 levels." David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement.

    As of October 2008, the 10-City Composite Home Price Index is down 25.0 percent from its mid-2006 peak, and the 20-City Composite Home Price Index is down 23.4 percent, he said.

    The U.S. housing market is in the worst downturn since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down home prices.

    Economists believe the U.S. housing market will not begin to recover until home prices fall far enough to stimulate demand, which has dropped off precipitously as potential buyers stay sidelined.

    Data through October 2008 showed continued broad based declines in the prices of existing single family homes across the United States, with 14 of the 20 metro areas showing record rates of annual decline and 14 now reporting declines in excess of 10 percent versus October 2007.