US house prices ‘see record fall’

US house prices were down a record 15.4% in the April and June quarter compared with a year ago, according to a closely-watched report.

The decline was recorded by the latest S&P/Case-Shiller survey of US national home prices.

The report said the falls were nationwide in the latest sign that the US housing downturn is continuing.

The figures come a day after a separate study said the volume of home sales in July were down 13.2 on the year.

‘Mortal enemy’

Housing analyst Gary Shilling said a key problem for the housing market was the oversupply of unsold new homes built during the recent boom years, which he estimated still stood at 1.8 million properties.

“The key point is we are a long way from bottoming out,” he said.

“The bulls keep hoping otherwise, but the basic problem is excess inventories. They are the mortal enemy of prices.”

The S&P/Case-Shiller survey bases its findings on 20 of the largest US cities.

Those that saw the biggest drop in prices from the second quarter of 2007 to that of this year were the sunbelt cities of Las Vegas (-28.6%), Miami (-28.3%), and Phoenix (-27.9%). Falls were also particularly sharp in Southern California, which had previously seen a huge boom.

The least affected city was Charlotte, North Carolina, which saw prices fall only 1%.

The continuing falls in the housing market are likely to prove a further headache for the banking sector, which has suffered huge losses as the value of its bonds linked to house prices has fallen.