By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — U.S. home prices took a fall in September, according to a key index released Tuesday, ending a string of five monthly gains as the housing market continues to struggle to generate momentum.
The S&P/Case-Shiller 20-city composite index fell 0.6% in September to take the year-on-year decline in home prices to 3.6%. The worse-than-expected drop limited third-quarter price appreciation to a scant 0.1%.
Only three cities, New York, Portland and Washington D.C., saw monthly gains, and another three cities, Atlanta, Las Vegas and Phoenix, registered new lows.
Another home price gauge from the Federal Housing Finance Agency is due for release Tuesday morning.
“The markets are fairly thin, and the relative lack of closed transactions might be exacerbating the downside,” said David Blizer, chairman of the index committee at S&P Indices.
While the plunging collapse of prices seen in 2007 to 2009 “seems to be behind us,” Blitzer said any chance for a sustained recovery will probably need a stronger economy.
The slight third-quarter advance put home prices back where they were in the first quarter of 2003. Home prices are down 31% from their peak in 2006.
Separately, CoreLogic reported that 10.7 million, or 22.1%, of all residential properties with mortgages were in negative equity at the end of the third quarter, which compares to 22.5% at the end of the second quarter.
Other data on the housing market has shown signs of bouncing along the bottom. Mortgage originations during the third quarter fell 17% to their lowest level since mid-2000, while data on existing- and new-home sales have been stuck in a tight range. Read more on consumer debt during the third quarter.
Only multi-family housing starts have shown signs of strong growth.
Steve Goldstein is MarketWatch's Washington bureau chief.
