â€œA number of factors continue to dampen any recovery in the housing market,â€ said Mark Fleming, chief economist with Core Logic. â€œNegative equity, which limits the mobility of homeowners, weak demand, and the overhang of shadow inventory all continue to exert downward pressure on housing prices.â€
He said he expects demand to pick up in the spring.
With distressed sales included, Idaho price dropped the most at 15.7% in January compared to a year earlier. It was followed by Alabama which dropped 12.1%, Arizona at 11%, Oregon at 9.9%, and Utah at 9.8%.
Some states managed to show appreciation in home prices, led by West Virginia at 5.5% and North Dakota at 3.3%.
Core Logic data also showed 11.1 million residential properties were in negative equity at the end of 2010, representing 23.1% of homes, and up from 10.8 million in the previous quarter. Another 2.4 million borrowers in the U.S. had less than 5% equity in the fourth quarter.
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Including distressed sales, national home prices slipped 5.7% in January compared to a year earlier, coming off a 4.7% decline in December. Excluding distressed sales, prices in January were down 1.6%.