The S&P/Case-Shiller index's decrease was more than forecast and compares with an 18.6 percent decrease in December. The gauge has fallen every month since January 2007, and year-over-year records began in 2001.
A glut of unsold properties may keep prices low, shrinking household wealth and damping spending. Still, sales of new and previously owned homes rose in February, indicating the housing slump, now in its fourth year, may ease as policy efforts to unclog credit and aid borrowers begin to take hold.
“There is still a lot of downward momentum,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York. “We don’t think we’ll see a bottom in home prices until the second half of next year. The decline in home prices will continue to depress household balance sheets.”
All 20 cities in the index showed a year-over-year price decrease in January, led by a 35 percent drop in Phoenix and 32.5 percent drop in Las Vegas. The index in January was at its lowest level since late 2003.
All of the 20 areas covered also showed declining home prices from the prior month.
“At this point it doesn’t look great for the near term,” Robert Shiller, chief economist at MacroMarkets LLC and a co-creator of the home price index. Still, he said, prices “can’t keep declining at this rate forever.”