Home Prices Tumble in 80 Percent of U.S. Cities

By Kathleen M. Howley, Bloomberg

Home prices fell in four out of every five U.S. cities in the third quarter, a record spurred by distressed foreclosure sales across the country.

The median price of a U.S. home declined 9 percent from a year earlier and sales of properties with mortgages in default accounted for at least a third of all transactions, the Chicago- based National Association of Realtors said today. Prices fell in 120 U.S. metropolitan areas, rose in 28 and were unchanged in four, the biggest share of declines in data going back to 1979.

The financial turmoil sparked by the collapse of the U.S. subprime mortgage market has caused $666 billion of losses for U.S. banks, lenders and insurers. U.S. companies slashed 1.4 million jobs in the last six months, the biggest cut since 1975.

“Housing is front and center of the financial crisis,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “So long as house prices are declining and foreclosures mounting, the financial system will struggle and the economy will be in recession.” Read more….