Home prices post steepest drop in 16 years

The decline is accelerating, with prices falling faster in every month since the start of the year.
By MSN Money staff with wire reports
The housing market just got even uglier.
A decline in U.S. housing prices in July was the steepest drop in 16 years, according to the nationwide S&P/Case-Shiller home price index released this morning.
The downturn in the U.S. housing market has been blamed for creating turbulence in international money markets and has kindled domestic concerns about a possible recession. Federal Reserve policymakers cut short-term interest rates by half a percentage point last week in an effort to bolster economic growth.
Home prices were lower in 15 of 20 metropolitan areas, the report showed. A subindex of 10 metropolitan areas fell 4.5% in July, the biggest drop since July 1991. The largest declines over the past year were in Detroit; Tampa, Fla.; and San Diego. Seattle and Charlotte, N.C., had the biggest increases.
Home prices have fallen by more every month since the beginning of the year.
David Blitzer, the chairman of the Standard & Poor's index committee, said the big declines may be done by the end of the year.
"Maybe the first stage is steep declines, and we're just about done with those," he said. "The second stage is not much gain, not much loss. The rest of the economy has to catch up to home prices."
Yale economist Robert Shiller, who helped create the indexes, said in a statement, "The further deceleration in prices is still apparent across the majority of regions." Shiller is also MacroMarkets' chief economist and perhaps is best known for predicting the dot-com bust.
Shiller told lawmakers in written comments last week that the loss of a boom mentality among consumers poses a "significant risk" of a recession within the next year.
credite by: msn.com