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Declines in United States house prices are continuing to accelerate, say surveys that signal there will be no quick end to the credit crisis.
The price of the average home was 11 per cent lower than a year ago, the S&P Case-Shiller index showed yesterday, as repossessed homes flood the market - and economists predict that the price adjustment may be little more than half over.
The Case-Shiller index is one of the most widely followed measures of the US economy because American homes are the collateral that supports hundreds of billions of dollars of mortgage-backed securities and other credit derivatives.
The latest figures cover house prices in 20 metropolitan areas in January and show that price declines have spread far beyond the once-hot speculative markets in Florida, the south-west and crumbling industrial towns. Now, Charlotte, North Carolina, is the sole region showing year-on-year gains.
The year-on-year decline of 10.7 per cent in the average house price is worse than anything seen in the last downturn in the early 90s. Prices fell 2.4 per cent in just one month.
"It does not look like early 2008 is marking any turnaround in the housing market," said David Blitzer, S&P index committee chairman.
"Home prices continue to fall ... No markets seem to be immune from the housing crisis."
A second measure of the housing market, by the mortgage regulator Ofheo, showed a 3 per cent year-on-year decline in January. It excludes many pricier homes.
Falling property values are now feeding through to weaker consumer confidence. The monthly Conference Board survey set a new five-year low in March, the reading of 64.5 coming in well below Wall Street expectations of 73. It was the third sharp decline in as many months.
The disappointing data came a day after sales figures for February raised hopes that a bottom might be near for the beleaguered housing market.
Kevin Logan, senior US economist at Dresdner Kleinwort, said he expected house prices would eventually reset to 2004 levels - about 20 per cent below their peak in 2006.
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