Home Prices Continue To Decline

The S&P Case-Shiller 20-city Home Price Index fell 0.9 percent in July and is down a record 16.3 percent over the past year. The pace of decline had shown steady moderation over the late spring and early summer, but declines accelerated in July as mortgage rates rose. Las Vegas, Phoenix and San Francisco posted the biggest drops in July.

When will Housing Prices Bottom out?

• The Case-Shiller 10-city composite measures prices in many of the nation's most volatile markets. This price measure surged more during the boom and is falling more during the bust. We expect it to bottom late next year or in early 2010.
• Continued stresses in fixed income and mortgage markets will keep pressure on prices for months to come.

Prices are Down from their Peak Across the Board

• Prices have fallen in all 20 cities in the Case-Shiller Index. Most of the largest declines are in formerly booming markets such as Florida, California, Nevada and Arizona.
• While July saw the sharpest declines in three months, the pace of declines may start to slow in coming months. With financial markets in turmoil, much remains unclear.

Wachovia Corporation
http://www.wachovia.com

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