Last year the housing market appeared to be headed toward a recovery with gains mainly coming from a popular credit for buyers but since then sales and prices have been getting weaker.
Now, the Standard & Poor's/Case-Shiller index of home prices in 20 major cities around the nation shows that home prices have dropped to new lows since last March and as a result has cast further doubt about the future of the housing market's recovery.
Confirming a much-feared double-dip in home prices the index pushed below its previous bottom hit in April 2009.
David Blitzer, chairman of the S&P index committee, said, "This month's report is marked by the confirmation of a double-dip in home prices across much of the nation. Home prices continue on their downward spiral with no relief in sight."
The most troublesome problems to home prices are the large number of foreclosure properties that are currently on the market as well as a lack of demand from buyers since the new homebuyer tax credits expired. As home prices continue to fall, economists fear that the nation's housing market could enter a new downward spiral.
Despite the fact that economists indicate that there are many positive factors in purchasing a home today, which include better affordability and record low interest rates, unfortunately falling home prices do affect a buyers psychology because they don't want to lose money on their investment which may drop further in value after they buy a home.
Of the 20 cities tracked by the index Los Angeles was down 1.7%, San Diego fell 4.0%, and San Francisco dropped 5.1%.