July 31 (Bloomberg) -- Home prices in 20 U.S. cities fell the most in at least six years, suggesting the housing recession has yet to touch bottom.
The S&P/Case-Shiller index of home prices in 20 metropolitan areas dropped 2.8 percent in May from a year ago, led by declines in Detroit and San Diego, according to the report issued today by Standard & Poor's and MacroMarkets LLC. The drop was less than the median forecast of four economists surveyed by Bloomberg News.
The declines indicate that housing will continue to hamstring the world's largest economy, economists say. A glut of unsold properties and mounting defaults are forcing builders to scale back construction and hindering consumer spending as homeowners are less able to borrow against home equity.
``Things are getting worse rather than better,'' said Sal Guatieri, senior economist at BMO Capital Markets in Toronto. ``If home prices keep falling, eventually consumer confidence and spending will take a hit.''
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