The Feb S&P/CaseShiller 20 city home price index fell 18.63% y/o/y, a touch better than expected but with a slight downward revision to Jan to a fall of 19%. The index is now down 30.7% from its record high in July
’06. Both on a m/o/m and y/o/y basis, all 20 cities saw declines. The y/o/y declines saw the same culprits leading the way, Phoenix, Las Vegas, San Francisco, and Miami. The smallest decline both m/o/m and
y/o/y was in Dallas.
The bank ‘stress test’ adverse scenario assumed a top to bottom fall of about 45% in the 10 city index which would imply another 20% fall from here in house prices. Unlike the FHFA report, CaseShiller does include jumbo’s, subprime and alt a backed mortgages but isn’t as geographically diverse in its coverage. With months supply still almost twice the long term average, economics 101 says that prices still have further to fall.
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