Case-Shiller's 20-city composite fell by a bit less than 1 percent in September.
Home prices fell in September, according to the Case-Shiller numbers out this morning.
Prices were down by a bit less than 1 percent compared to the previous month, according to the index. For the third quarter as a whole -- July through September -- prices fell by two percent compared to the prior quarter.
These figures are a little worse than expected, but they aren't particularly surprising. A government program that propped up prices by paying people to buy houses expired at the end of the spring. It's natural that we should see a dip in prices after the end of the program.
So are we just seeing a temporary dip caused by the end of the program, or do prices have further to fall?
They probably have further to fall.
It would take more than eight months to sell all of the newly built homes on the market, and more than 10 months to sell all the existing homes on the market. In an ordinary market, those figures are around six months. In other words, there's still a glut of homes on the market, which is likely to drive prices down.
Or, as one analyst told Bloomberg News this morning: "Supply far exceeds demand and the only remedy is further price declines."
What's more, about a third of all homes being sold are in some stage of the foreclosure process. That's also high by historic standards, and also tends to push prices down.
When we talked to Mark Zandi last month, he said it's likely to be a year or so before the percentage of distressed sales falls and the housing market gets back to some semblance of normalcy.