October Home Prices in 20 U.S. Metro Areas Fall 18% (Update3)

By Bob Willis

Dec. 30 (Bloomberg) -- Home prices in 20 major U.S. cities declined at the fastest rate on record, depressed by mounting foreclosures and slumping sales.

The S&P/Case-Shiller index declined 18 percent in the 12 months to October, more than forecast, after dropping 17.4 percent in the year through September. The gauge has fallen every month since January 2007. Year-over-year records began in 2001.

The financial market meltdown that’s reverberated around the globe has prompted banks to curb lending, signaling the housing slump will persist for a fourth year in 2009. Falling property values have eroded household wealth, causing consumers to pare spending and deepening what is projected to be the longest recession in the postwar period.

“We’re seeing a shift to a housing market that is driven by a poor economy rather than a housing market that’s driven by oversupply,â€