US house prices flat in October
The Standard & Poor’s/Case-Shiller composite index of 20 metropolitan areas remained flat in October after rising by a revised 0.4% the previous month.
The latest figures dashed hopes of a sixth consecutive monthly increase and fell short of analysts expectations who had hoped for a 0.2% rise.
Meanwhile, on an annual basis, the 20-city index was 7.3% down compared with a year ago.
However, economists are predicting a double dip in prices this winter as a result of a rise in foreclosures and the gradual withdrawal of Government support.
The index is now up 3.4% from its low point in May, but still nearly 30% below its high in April 2006.
Standard & Poor’s also said that the other main index, which covers ten cities, was also unchanged in October and was down 6.4% on an annual basis.
Since the summer, house prices have risen due to the influx of homebuyers trying to complete their deals before the original expiration date of the Government’s first-time buyer tax credit.
The tax credit had been due to expire on November 30 but has now been extended to April 30.
Commenting on the data, David Blitzer, the chairman of the index committee of Standard & Poor’s, said: “Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip.
“Before jumping to conclusions, recognise that the one time that happened at the beginning of the 1980s, Fed policy saw dramatic reversals, which is very different from the stable and consistent Fed policy we have today,” added Mr Blitzer.
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