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U.S. home prices fall in third quarter

U.S. homes prices fell in the third quarter by 3.2 percent.

U.S. homes prices fell in the third quarter by 3.2 percent.

The Federal Housing Finance Agency reported, as demand from moving families weakened without federal tax cuts, American home prices decreased by 3.2 percent in the third quarter from a year ago.

Among the largest metropolitan areas, the Atlanta region led declines with a 10 percent fall, according to the FHFA. In contrast, the agency noted San Diego area home prices moved upwards by a 4.6 percent margin.

Many economists predict the trend will continue well into next year. Celia Chen, an analyst with Moody’s Analytics, told Bloomberg, “Our overall expectations for home prices is that they’ll drop by another 8 percent by the third quarter of next year.”

After the tax credit expiration, home sales fell to record-low levels, and with a large inventory of distressed properties as well as an unemployment rate near 10 percent, more price declines are expected, according to Chen.

Other analysts say growth in 2011 will be halted by numerous variables, including high debts, a decline in government stimulus and lower business spending, according to the National Association of Business Economists.