Case-Shiller Index Plunges a Record 19%
Is this the recovery that everyone is buzzing about right now? The Case-Shiller Home Price Index for January was just released a few minutes ago. Its survey of home prices in 20 cities dropped a record 19% year-over-year. This is slightly worse than the 18.6% decline that economists were looking for and it represents an acceleration in the decline on home values. Month-over-month prices dropped 2.8%. This compares to a drop of 2,6% from November to December.
I realize that we are almost in April now so this data is a little old, but still it's not encouraging. The only positive changes that have happened since January are that mortgage rates have dropped to record-low levels and consumer confidence seems to be slightly better. Offsetting low mortgage rates is the rapid rise in foreclosures. Despite efforts to slow their pace, RealtyTrac recently reported that foreclosures aoared nearly 30% in February, up from a 17.8% increase in January. Many people believe that home prices are close to reaching a bottom, but I remain very skeptical.