A closely watched gauge of U.S. home prices, the Case-Shiller Home Price 20-city index, dropped 1percent in August and fell a record 16.6percent from the previous year as the downturn in residential real estate prices continued, Standard & Poor published Tuesday. Prices have now fallen 20.3percent from their peak in June 2006.
Meanwhile, the S&P Case-Shiller Home Price 10-city index dropped 1.1 percent for in August and plunged a record 17.7 percent over the past year.
Over the past year, Phoenix and Las Vegas experienced the largest declines, down nearly 31percent in both cities. Prices fell the least in Dallas, down 2.7percent, and in Charlotte, N.C., down 2.8percent. No city showed a price gain during the last 12 months.
Home prices surged in 2003 through 2006, climbing by a cumulative 52percent, according to Case-Shiller. Since then, however, homeowners have given up half of the gains from earlier in the decade as the housing and credit bubbles burst.
Falling prices have eroded Americans' wealth, cutting into their ability to borrow against the equity in their homes or refinance their mortgages or sell for a profit. Millions of Americans now owe more on their homes than the homes are worth.
The plunge in home prices also led to massive losses in major banks which in turn triggered financial crisis that have rippled to around the globe.
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