Homes Prices Fall in 80% of U.S. Cities

WASHINGTON (TheStreet) -- Home prices fell in more than half of U.S cities in the third quarter, and a good chunk of sales were of homes that were heavily discounted.

The National Association of Realtors said on Tuesday said the median sales prices of existing homes fell in 123 out of 153 metro areas; prices, naturally, rose in the other 30 cities.

The national median price came in at $177,900, which is 11% lower than the third quarter last year.

"The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas," said Lawrence Yun, the group's chief economist, in a statement. "But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market."

Investors are hoping the extended $8,000 tax credit for new home buyers will help boost sales going forward. The bill also includes a $6,500 tax break for buyers who have owned their current home for at least five years and are purchasing a new one.

Shares of homebuilders ended the day in the red. KB Home(KBH Quote) fell 3.3% to $14.68, Lennar(LEN Quote) decreased 2.1% to $14.30, MDC(MDC Quote) dropped 3% to $32.25, D.R. Horton(DHI Quote) was off 3.6% to $11.69 and Pulte Homes(PHM Quote) tumbled 3.5% to close at $9.46.

-- Reported by Jeanine Poggi in New York

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