NEW YORK ( TheStreet) -- U.S. home prices dropped in October as home prices slipped in 19 of 20 monitored cities.
The S&P/Case-Shiller 20-city index of national home prices fell 1.2% in October. The index was 3.4% lower than in the same month a year earlier, exceeding the 3.2% decline forecast by economists, according to Thomson Reuters.
The S&P/Case-Shiller 20-city index is a moving three-month average, so data for October was swayed by data from August and September.
In October, the 10-city composite showed a slightly smaller decrease of 1.1%."Given the imbalance between prices, supply and demand, declines in prices should not be surprising and indeed, we believe that further price declines still lay ahead," Dan Greenhaus, chief economic strategist for BTIG, wrote in a note. Falling home prices have helped spur potential buyers. Data released Dec. 23 showed that sales of newly-built homes rose by a more than expected 1.6% in November. The recent uptick in new-home sales accompanied an advance in homebuilder sentiment, as reported by the National Association of Home Builders last week. The NAHB/Wells Fargo housing market index rose for a third consecutive month in December, climbing 2 points to a reading of 21 from a downwardly revised 19 in November, beating the average of 20 expected by economists. Any reading below 50 indicates that more builders view market conditions to be unfavorable than those who view it favorably. The index has not been above 50 since the spring of 2006. "While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets," NAHB Chairman Bob Nielsen said last week. However, worse than expected sales of existing homes also pointed to sluggish housing market recovery. Existing-home sales for November rose 4% to a seasonally adjusted annual rate of 4.42 million units from 4.25 million in October, according to the National Association of Realtors. The reported figure for November was a disappointment given that October sales were downwardly revised from 4.97 million to 4.25 million units. The National Association of Realtors is expected to report that pending home sales -- which measures the number of contracts signed to buy previously owned homes - increased 2% in November. The NAR report is due out Thursday morning. Stocks in the homebuilder sector were little changed this morning, though the SPDR S&P Homebuilders (XHB) exchange-traded fund that track sthe sector was falling 0.3% to $17.04. Among individual builders, PulteGroup (PHM - Get Report) was gaining 0.2% to $6.09. Toll Brothers (TOL - Get Report) was climbing 0.9% to $20.31. Lennar (LEN - Get Report) was advancing 0.2% to $19.40. D.R. Horton (DHI - Get Report) was falling 0.2% and KB Home (KBH - Get Report) slid 0.6%.
-- Written by Kaitlyn Kiernan in New York.
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