Marking the sixth straight month of declines, national house prices fell 2.3 percent in January, according to the latest IAS360 House Price Index (HPI) released Wednesday by Denver-based ""Integrated Asset Services, LLC (IAS)."":http://www.iasreo.com/index.html
[IMAGE]The culprit? IAS says unusually severe winter weather in large regions of the country may have added to housing market woes. This was likely the case in the Midwest where prices dropped another 2.6 percent for the month, following a similar drop in December. The region includes hard-hit states like Illinois, down 4.9 percent; Missouri, down 4.4 percent; and Minnesota, down 3.5 percent.
The remaining three U.S. census regions also saw declines in January. Prices in the Northeast slipped another 0.5
[COLUMN_BREAK]percent, and prices in the West were down 2.6 percent. In addition, the South saw a 2.2 percent drop in prices, which was mostly the result of double-digit declines in Georgia and Alabama.
The collective damage created the largest single-month decline in the IAS360 in more than a year and left the HPI down some 30 percent from its high in mid-2007.
""It's clear the housing market is struggling to rebound on just about every level,"" said Dave McCarthy, president and CEO of IAS. ""We're looking at the most granular data available in the industry, and it would appear the housing recovery is going to be more prolonged than originally anticipated.""
There also remains an ongoing concern over the number of repossessed homes that lenders are holding back from the market. The ultimate liquidation of this so-called shadow inventory, which by most estimates is somewhere between two and seven million houses, has the potential to drive down home values in neighborhoods around the country, IAS said.
McCarthy believes this hidden supply could take several years to clear from the national inventory. He said the potential for a whole new wave of distressed activity down the road is very likely, and he feels the risk of further weakening in home values is considerable.