U.S. home prices cheapest since 2003: report

Average U.S. home prices slipped in November to the lowest they've been since 2003, according to the authoritative Case/Shiller Index numbers released by Standard & Poor's today. Read them here, check out particularly the second chart, which compares prices over the years. (Real prices have fallen still further, if you consider the effect of inflation).

Philadelphia home prices are also down, according to eConsult economist Kevin Gillen - though financial data processer Fiserv, working off Case/Shiller data, predicts they'll start rising again this fall, my colleague Al Heavens reports here.

Home prices started falling in the mid-2000s after a generation of rising prices fed, especially in the Clinton-Bush years, by easy-money policies, cheap credit, and high demand from Wall Street investors for mortgage-backed securities.

After everyone who wanted and could afford a home owned one (or more), under-employed borrowers and speculators started defaulting, non-bank mortgage lenders collapsed, and banks tightened their lending policies. The result is a surplus of homes Americans can't afford, plus millions of foreclosed and uninhabited homes that have kept prices depressed, while Congress and the Obama administration delay reforms to mortgage financing giants Fannie Mae and Freddie Mac.