By Agency Reporter

Wednesday, 26 Jan 2011

WASHINGTON: Residential real-estate prices dropped in November by the most in a year, signaling housing has yet to join the United States rebound.

The S&P/Case-Shiller index of home values in 20 cities fell 1.6 per cent from November the prior year, the biggest 12-month decrease since December 2009, the group said today in New York. The decline matched the median forecast of economists surveyed by Bloomberg News.

Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’ equity and construction. The lack of a sustained housing rebound and unemployment above nine per cent are among reasons the Federal Reserve may announce this week it’ll complete a second round of stimulus that will pump $600bn into the economy by June.

“The housing market is in a state of hibernation,” said Zach Pandl, an economist at Nomura Securities International Incorporated in New York.

“We have a very severe foreclosure problem. Prices are going to keep weakening this year. Weakness in the housing market is likely to keep the Fed relatively cautious in its statement tomorrow,” he added.

Stock-index futures held earlier losses after the report as earnings at Texas Instruments Incorporated and American Express Company disappointed investors.

The contract on the Standard & Poor’s 500 Index maturing in March fell 0.4 per cent to 1,283.2 at 9:26 am in New York. Treasury securities rose, sending the yield on the benchmark 10-year note down to 3.37 per cent from 3.41 per cent late Monday.

The median forecast was based on a survey of 26 economists. Estimates ranged from declines of 2.1 per cent to 0.1 per cent. Year-over-year records began in 2001. The decrease followed a 0.8 per cent year-over-year drop in October.

Source: Punch