In 19 of 20 U.S. cities home prices declined during the month of October. The average price of a home in the cities monitored in the index was down 3.4 per cent from the same month last year. This was more than the 3.2 per cent that economists surveyed by Bloomberg had forecast.
Atlanta Georgia had the biggest fall, off 11.7 per cent from last year. Only Phoenix Arizona bucked the trend. Perhaps Canadian snowbirds are snapping up bargains while they last driving up prices.
Many analysts predict that there will be a further decline next year. Many foreclosures were put on hold earlier and now the foreclosures will resume. This will add to unsold housing stock and weaken prices. A regulator reported that in the third quarter foreclosures had jumped 21 per cent from the same quarter last year.
Unless economic conditions improve for many households there could be even more foreclosures. Almost a quarter of U.S. homeowners owe more on their mortgages than the worth of their houses. For more see this article.