Home Prices Down in Most Major U.S. Cities

Home prices were down 3.4 percent in October from the same time last year, according to the Standard & Poor's Case-Shiller home price index of 20 leading U.S. cities.

U.S. home prices continued to fall despite improving consumer confidence. Prices were also down from September, on a non-seasonally adjusted basis, in 19 of the 20 cities the index covers. The poor showing stands in contrast to several months earlier this spring and summer when prices showed signs of rising or stabilizing.

Those increases probably resulted from a foreclosure slowdown following revelations last fall that paperwork and processes weren't always completed properly, said Patrick Newport, economist with IHS Global Insight. Now, mortgage companies are stepping up foreclosure activity and that's driving prices lower.

A Zillow survey of 109 top housing experts indicated that U.S. home prices will decline until late next year or early 2013.
Several factors will hamper home prices , economists say, including:

• Negative equity. About 22 percent of homeowners with a mortgage owe more on their homes than they are worth. Those people are not likely to move and buy another home, said Christopher Thornberg of Beacon Economics.
• Foreclosures. Nationwide, more than 6 million homeowners were late on their home mortgage payment or were already in foreclosure at the end of the third quarter. As more people lose their homes, the distressed sales will put downward pressure on home prices, according to Newport.

- Courtesy of USA TODAY, Julie Schmit