National home prices continued to fall lower during November, according to the most recent Standard & Poor's/Case-Shiller Home Price Index.
The index showed that home prices dipped by 3.7 percent in November from a year earlier, as the 10- and 20-city composites fell by 3.6 and 3.7 percent, respectively. Both composites edged 1.3 percent lower from the previous month. In addition, prices in 19 of the 20 largest metro areas examined in the report indicated marked declines in home prices during the month.
With the falling prices toward the end of 2011, the report stated that home prices are now one-third lower than they were at the housing market's peak in 2006 and are now close to the level seen in the middle of 2003.
"Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall," said Index Committee chairman David M. Blitzer. "Weakness was seen as 19 of 20 cities saw average home prices decline in November over October."
Meanwhile, on a local level, November home prices in Atlanta fell by nearly 12 percent form a year earlier, marking the largest individual decline of all the metro areas. In addition, Atlanta, Las Vegas, Seattle and Tampa all reached new lows in November.
"Atlanta continues to stand out in terms of recent relative weakness," the report stated. "It was down 2.5 percent over the month, after having fallen by 5.0 percent in October, 5.9 percent in September and 2.4 percent in August. It also posted the weakest annual return, down 11.8 percent."
In contrast, the Detroit and Washington, D.C., housing markets were the only metro areas that had price appreciations in November on an annual basis with increases of 3.8 and 0.5 percent, respectively.
This is now the seventh consecutive month of home prices declines reported by the Home Prices Index. Due to prices continuously edging lower, the report stated that there are very few signs that the national housing market might change direction anytime in the near future.
However, analysts from Capital Economics noted that home prices should find their bottom by the middle of 2012 since an expected spike in home sales could help to put a floor under the home price free fall. A survey conducted by Freddie Mac anticipates existing home sales to rise buy as much as 2 to 5 percent over the course of 2012.
However, even though home prices are anticipated to continue falling, a number of recent surveys and forecasts indicate that the market will continue to tilt in favor of buyers.
According to the most recent Freddie Mac Primary Mortgage Market Survey, mortgage rates have hovered below 4 percent for eight consecutive weeks. The pairing of these low rates with falling home prices has made homeownership a more attainable goal for many prospective buyers who had previously been forced to wait on the sidelines at the housing market's peak.
Additionally, MarketWatch recently highlighted a number of these surveys that indicate why buying a home is starting to become a good idea. In addition to an anticipated spike in home sales, a recent industry group survey showed that 79 percent of industry experts feel home prices will reach their bottom by the end of 2012.
Meanwhile, the National Association of Home Builders added 35 new housing markets to its Improving Housing Markets Index, bringing the total to 76 in January.
