US housing prices slip in October

US home prices fell in October for the second straight month despite record-low home loan borrowing rates, a key index of the industry showed last Tuesday.

Prices across 20 leading metropolitan areas fell on average by 0.6 per cent from September, and were 3.4 per cent lower than a year earlier, according to the S&P/Case-Shiller 20-City Composite index.

The figures suggested the US housing market remained stuck in the trough of a second recession in four years, and that cheap rates for mortgages have not yet sparked a much hoped-for turnaround in the depressed housing industry.

Housing prices remain at the same level of mid-2003, having plunged sharply from their peak in July 2006. Current prices are now 32 per cent below their peak, according to the Case-Shiller data.

On an adjusted basis, prices were flat or rose in six of the 20 cities, and fell in the rest last month.

The capital Washington DC remained the strongest market, with prices gaining 0.3 per cent in the month, and were 1.3 per cent up from a year earlier.

Atlanta, Georgia remained the weakest market.

“In the October data, the only good news is some improvement in the annual rates of change in home prices, with 14 of 20 cities... seeing their annual rates of change improve,” said S&P’s David Blitzer in a statement.

“Some of the other housing statistics posted relatively healthy figures for November, but it seems that most of the good news was confined to the multi-family sector” rather than single-family homes, he said.