US House prices fall at fastest rate in 16 years.

According to Standard & Poor's Case-Shiller home price index released yesterday home prices in 10 major U.S. cities dropped at the fastest pace in 16 years during the 12 months ending in April, Home prices in the 10 cities fell 2.7% on a year-over-year basis, the largest decline since September 1991. The broader 20 cities index dropped a record 2.1% on a year over year.

The Case-Shiller index is considered a superior gauge of home prices compared to the median sales-price data released by the Commerce Department or the National Association of Realtors, because it tracks multiple sales on the same property and is therefore not influenced by a different mix of homes sold in a period. It also excludes refinancings and includes homes with mortgages larger than then the $417,000 limit of the other measures.


New Home sales fall 1.6% in May


Sales of new homes fell 1.6% in May from a downwardly revised 930,000 in April. That means last months strong 16.1% increase turned out to be a little less strong 12.5% increase. New home sales are down 15.8% in the past year. Inventories of unsold homes fell 1.1% to 536,000, representing a 7.1-month supply at the May sales pace.

As can be seen in the graph above, 2Q07 sales are an improvement on 1Q however we will need to see a few more months evidence of higher numbers before we can put the improvement down to more than just seasonal effects.