Home prices weighed down by distress in three out of four U.S. markets

Source: Wall Street Journal

U.S. home prices fell in nearly 75% of metropolitan areas in the third quarter and the national median price dropped as the housing market showed renewed weakness in the second half of the year.

The median price for previously occupied homes sold in the July-September quarter fell compared with last year in 111 out of 150 areas tracked by the National Association of Realtors, the trade group said Wednesday. Prices rose in 39 metro areas.

The results were roughly even with the second quarter, in which median prices fell in 109 out of 151 cities tracked by the real estate trade association. The national median price for single-family homes sold in the third quarter was $169,500, down 4.7% from the same quarter a year earlier.

Home sales in the third quarter were down 0.1% from the second quarter, but were up 17% from a year earlier, the Realtors’ group said.

“Home sales need to recover first, only then can prices stabilize,” said Lawrence Yun, the Realtors’ chief economist, in a statement.

The metro areas showing the biggest decline in median prices from a year earlier were Mobile, Ala. (-17.7%), Phoenix, Ariz. (-17.6%), Allentown, Pa. (-17.5%) and Salt Lake City (-15.3%). Areas showing price increases were Grand Rapids, Mich. (23.7%), South Bend, Ind. (19.8%), Palm Bay-Melbourne, Fla. (17.7%) and Youngstown, Ohio. (13.1%).

With the economy weak and many Americans reluctant to commit to a home purchase, the housing market has been slow to recover from the worst downtown in decades. The Realtors’ group said last month that the number of people who signed contracts to purchase previously occupied homes in the U.S. sank in September to the lowest level in five months.

Nationwide, “distressed property,” including foreclosures and homes at risk of foreclosure, accounted for 30% of third-quarter transactions, down from 33% in the second quarter, the Realtors’ group estimated.

Corrections & Amplifications Home prices rose 13.1% in Youngstown, Ohio, in the third quarter. An earlier version of this article incorrectly indicated that the increase took place in Youngstown, Pa.

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