CoreLogic Records Second Consecutive Decline in Home Prices

""CoreLogic"":http://www.corelogic.com released its latest market analysis of residential property values Monday. The company's index shows U.S. home prices fell another 1.1 percent between August and September.

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It marks the second consecutive monthly decline recorded by CoreLogic and signals price depreciation is deepening. The company's previous report documented a 0.4 percent drop in national home prices between July and August.

Paul Diggle, property economist with the research firm ""Capital Economics"":http://www.capitaleconomics.com, says the “acceleration in the rate at which the CoreLogic house price index is falling reflects the slowing in the pace of job creation and wider economic growth earlier this year.”

Diggle adds that “prices may well fall further in the closing months of the year and, despite housing appearing very undervalued, prices probably won't rise for several years.”

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CoreLogic's September reading puts home prices 4.1 percent below their year-ago level. That follows a decline of 4.4 percent in August 2011 compared to August 2010.

Those figures include distressed sales â€" REO and short sale transactions. If you take the distress factor out of the equation, home prices are still on a downward trajectory, but not as far off the mark.

Excluding distressed sales, year-over-year prices declined by 1.1 percent in September when compared to a year earlier, according to CoreLogic.

“Even with low interest rates, demand for houses remains muted. Home sales are down in September and the inventory of homes for sale remains elevated,” commented Mark Fleming, chief economist for CoreLogic.

Fleming says home prices are adjusting to correct for the supply-demand imbalance, and as a result, he expects declines to continue through the winter.

“Distressed sales remain a significant share of homes that do sell and are driving home prices overall,” Fleming added.

According to CoreLogic’s latest report, the five states with the highest home price appreciation in September included: West Virginia (+7.0 percent), Wyoming (+3.8 percent), South Dakota (+3.6 percent), Maine (+3.5 percent), and North Dakota (+3.1 percent).

The five states with the greatest depreciation were: Nevada (-12.4 percent), Illinois (-9.2 percent), Arizona (-9.0 percent), Minnesota (-8.3 percent), and Georgia (-7.2 percent).