By Courtney Schlisserman
May 26 (Bloomberg) -- Home prices in 20 major metropolitan areas fell more than forecast in March as foreclosures surged, threatening to extend the housing slump.
The S&P/Case-Shiller home-price index decreased 18.7 percent from March 2008, matching the drop in the year ended in February. The measure declined 19 percent in January, the most since data began in 2001.
Record foreclosures are depressing the value of other properties, contributing to a slump in household wealth that is hurting consumer spending and the economy. Still, falling prices and mortgage rates have made homes more affordable, helping to stem the slide in sales, which will eventually help prices stabilize.
“The housing market still has somewhat of a ways to go before it completely bottoms,” Celia Chen, an economist at Moody’s Economy.com in West Chester, Pennsylvania, said in an interview on Bloomberg Television. “Prices I think still will fall a little bit further.”
The Standard & Poor’s 500 index rose 1.8 percent, to 903.03 as of 10:45 a.m. in New York. The yield on 10-year Treasuries was little changed at 3.46 percent from 3.45 percent yesterday.
Economists forecast the index would drop 18.3 percent from a year earlier, according to the median of 26 projections in a Bloomberg News survey. Estimates ranged from declines of 17.9 percent to 18.9 percent.
A separate report showed confidence among U.S. consumers jumped this month to the highest level since September, reflecting growing perceptions that the job market will improve. The Conference Board’s sentiment index surged to 54.9, higher than forecast and the biggest gain since April 2003, the New York-based research group said today.
Compared with a month earlier, home prices decreased 2.2 percent in March, also the same as in February, today’s Case- Shiller report showed.
The price figures aren’t adjusted for seasonal effects, so economists prefer to focus on year-over-year changes.
Today’s report also showed prices nationally fell 19.1 percent in the first quarter from the same period last year, the largest drop in the figure’s the 21-year history, and were down 7.5 percent from the last three months of 2008.
All 20 cities in the index showed a year-over-year price decrease in March, led by Phoenix, Las Vegas and San Francisco.