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S&P housing index shows price growth at slowest since Sept. 1996

Prices of single-family homes across the nation rose in November at the slowest rate in more than a decade, a housing index released Tuesday by Standard & Poor’s showed, countering other evidence that the housing slowdown may be nearing an end.

The S&P/Case-Shiller composite index showed a 1.3 percent year-over-year increase in the price of a single-family home based on existing homes tracked over time in 10 metropolitan markets.

For its 20-city composite index, prices grew 1.7 percent, the slowest rate ever for that data, according to the S&P index committee chairman, David Blitzer. That data has been collected since 2001.

“The weakness continues to spread,” Blitzer said. “I don’t see any signs of a bottom. Unfortunately, it’s still looking pretty nasty from a housing point of view.” The last time the growth dipped lower than 1.3 percent for the 10-city index was in September 1996, when it measured 1.2 percent.

All cities in the survey, except for Charlotte, N.C., showed a decline in annual returns when compared to the prior month. Seven of the 20 cities are showing negative annual returns.

“Countrywide, home price declines appear to show no signs of slowing down,” said Chief Economist Robert Shiller of MacroMarkets LLC. Shiller noted that the downward trend is seen nationally while certain cities such as Boston and Detriot have done worse. Seattle and Portland, meanwhile, have benefited from a strong jobs market in the Pacific Northwest.

New home sales fell in 2006 by the largest amount in 16 years, but they were up for a second straight month in December, adding to hopes that the worst of the housing slowdown may be over. S&P said its data showed the end is not yet in sight, though.

The Federal Reserve has been closely watching the housing market as it tries to slow the economy’s growth without pushing it into a recession. And in recent quarters, economists had said the housing slump was creating a drag on the economy and pulling down gross domestic product growth.

Housing is expected to be a prominent topic of discussion in a two-day Federal Reserve meeting that began Tuesday as the board evaluates the effect of a housing market slowdown on the overall economy.

Fed governors are widely expected to keep the benchmark interest rate in place at 5.25 percent, as they have at the past four meetings. The housing slump was a key reason the Fed cited for keeping rates in place at its December meeting.

The median price of a new home sold in 2006 rose by 1.8 percent to $245,300. In 2005, there was a 9 percent price gain.

National Association of Home Builders Chief Economist David Seiders said this week that home prices would continue to be depressed in 2007 as builders scramble to reduce near-record levels of unsold homes.