By Richard Leong
NEW YORK (Reuters) - Prices of existing U.S. single-family homes recorded their biggest annual drop in October, suggesting the housing slump is far from over, a national home price gauge released on Wednesday showed.
The Standard & Poor's/Case-Shiller year-over-year index of 10 metropolitan areas fell to 209.68 in October, down 6.7 percent from a year earlier. The decline surpassed the 6.3 percent drop in April 1991.
"No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," said Robert Shiller, chief economist at MacroMarkets LLC, in a statement.
The firms' newer, composite home price index on 20 metropolitan areas declined to 192.89 in October, down 6.1 percent from a year ago.
On a month-over-month basis, both indexes lost 1.4 percent in October compared with September.
The bleak housing data spurred more selling in stocks, which were already under downward pressure on worries over weak Christmas tallies among retailers. Bond prices were also stuck in the red, as the data failed to stoke hopes of more interest rate cuts from the Federal Reserve.
Eleven of the 20 metropolitan areas recorded their largest monthly decline on record in October, led by San Diego, where home prices fell 2.6 percent, according to S&P/Case-Shiller.
On an annual basis, single-family home prices in Miami recorded the biggest decline, down 12.4 percent in October, followed by Tampa with an 11.8 percent fall.
Charlotte, Portland and Seattle were the only cities still experiencing annual home appreciation in October, as tracked by the S&P/Case-Shiller indexes.
At least one economist predicted that home depreciation will continue well into 2008 in order to attract enough buyers to clear the huge backlog in inventories.
"It's painful medication but it's the one that works," said Gregory Miller, chief economist at SunTrust Banks Inc. in Atlanta.
"More likely, we'll be well into 2009 before we start describing this housing cycle as 'in recovery,"' Miller added.
(Additional reporting by Lynn Adler)
(Reporting by Richard Leong; Editing by Dan Grebler)