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| Carpenters work on a home under construction in Garner, North Carolina. Photographer: Jim R. Bounds/Bloomberg |
By - Dec 28, 2010
Bloomberg.com
Home prices dropped more than forecast in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year.
The S&P/Case-Shiller index of property values fell 0.8 percent from October 2009, the biggest year-over-year decline since December 2009, the group said today in New York. The decrease exceeded the0.2 percent drop projected by the median forecast of economists surveyed by Bloomberg News.
A wave of foreclosures waiting to reach the market means home prices will remain under pressure in 2011, representing a risk to household finances. Federal Reserve policy makers this month said “depressed” housing and high unemployment remained constraints on consumer spending, reasons why they reiterated a plan to expand record monetary stimulus.
“We’ll remain in negative territory for several more months,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York, who forecast a year-on-year drop of 1.3 percent. “The housing market does remain weak and none of the recent data suggest a substantial pickup.”
After retreating briefly, stock-index futures remained higher after the report as a jump in holiday sales boosted the outlook for consumer spending. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.2 percent to 1,255.5 at 9:23 a.m. in New York. The yield on the benchmark 10-year note rose to 3.36 percent from 3.33 percent late yesterday.
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