- The Washington Times - Tuesday, March 27, 2007

NEW YORK (AP) — Prices of single-family homes across the nation depreciated in January compared with a year ago, the worst results in more than 13 years, a housing index released yesterday by Standard & Poor’s showed.

The data underscored disappointing sales figures released by the government Monday.

The S&P;/Case-Shiller composite index showed a drop of 0.7 percent from a year ago in the price of a single-family home based on existing homes tracked over time in 10 metropolitan markets. In January 1994, the index dropped by 0.9 percent compared with January 1993, S&P; said.

For its 20-city composite index, prices fell 0.2 percent. That data has been collected since 2001.

Government sales figures reported Monday showed that the number of new-home sales in February fell to the lowest level in seven years, and followed an even larger drop of nearly 16 percent in January.

On a year-over-year basis, 11 of the 20 cities in the S&P; index showed negative annual returns in their prices, including Washington.

All cities in the survey, except for Charlotte, N.C., showed flat or negative returns in January from December.

MacroMarkets LLC chief economist Robert Shiller said the composites clearly show the “dire” state of the real estate market across the nation.

“The dismal growth in the 10-city composite is now at rates not seen since January 1994,” Mr. Shiller said.

Lennar Corp., the largest U.S. home builder by revenue, said yesterday that earnings plunged 73 percent in the fiscal first quarter. The Miami-based company also said that it likely will miss its 2007 profit forecast.

“The housing market continues to demonstrate overall weakness,” Chief Executive Stuart Miller said. “While some markets are performing better than others, the typically stronger spring selling season has not yet materialized. These soft market conditions have been exacerbated by the well-publicized problems in the subprime lending market.”

Since the start of February, home builders KB Homes, Hovanian and Toll Brothers Inc. all reported falling profits.

The downward trend is reflected in data across the nation, while certain cities such as San Diego, Detroit and Boston have done worse.

Seattle and Portland, Ore., meanwhile, show some resistance to the downturn.

Federal Reserve governors watch housing as one of the most important indicators of the health of the overall economy. Economists are concerned that the slump in housing will drag down growth as the slowdown affects consumer spending and the construction industry.

A week ago, Fed governors held the benchmark interest rate in place at 5.25 percent, meaning that the prime interest rate used by commercial banks will stay at 8.25 percent. It was the sixth meeting in a row the Fed has held steady.

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