As the Fed spends another gazillion dollars to shore up the global financial system, the market that started it all continues to collapse.
Prices of single-family homes in the US were down a record 17.4 per cent year on year in September, according to the Standard & Poor’s/Case-Shiller Home Price indices. The rate of declines measured on a quarterly basis has also accelerated, suggesting earlier optimism about a ‘floor’ for house prices was overblown.
A composite index measuring prices in 10 metropolitan areas fell 1.9 per cent during the three months to September from the three months to August, and a record 18.6 per cent year over year.
“The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals,” David M. Blitzer, chairman of S&P’s index committee, said.
And here’s the kicker, emphasis FT Alphaville’s:
“All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004. As of September 2008, the 10-City Composite is down 23.4% from its peak, the 20-City Composite is down 21.8% and the National Composite is down 21.0%.”