Oct 2 (Reuters) – Housing prices across South Korea fell 0.2 percent in September from August, private-sector data showed on Tuesday, marking their third consecutive monthly decline and underscoring a stubbornly weak consumer sentiment.

Housing prices fell by 0.1 percent each in August and July on a month-on-month basis and it was the longest losing streak seen since early 2009, the data from Kookmin Bank showed.

Compared with a year earlier, housing prices in September were just 1.2 percent higher, the data showed, setting their slowest annual growth since November 2009.

The impending fiscal cliff in the U.S. threatens an improving housing market, both in the U.S. and in Portland.

Clear Capital, which analyzes the housing market, today released its Home Data Index Market Report saying the cliff could “throw a wrench” into the recovery.

The “fiscal cliff” refers to several U.S. tax policies slated to end this year. Yesterday, the nonpartisan Tax Policy Center predicted taxes could rise by more than $500 billion next year unless Congress restores some tax breaks. Nearly 90 percent of Americans would pay higher taxes.

The Clear Capital housing analysis ranked Portland No. 16 in the country, based on a predicted 4.3 percent rise in housing prices in the next six months. According to the Regional Multiple Listing Service, the average price of a Portland home is $281,700 — the highest level in five years.

Portland housing prices increased 4.3 percent between the second and third quarters and 6.3 percent year-over-year.

Prices in the majority of the top 50 housing markets are improving, with average price gains of 2.4 percent. Housing prices in Phoenix are 27.7 percent higher than they were a year ago. At 9.4 percent, the western U.S. recorded the highest overall increase in yearly housing prices.

However, the report found that fear from the impending fiscal cliff threatens consumer confidence and will discourage potential home buyers.

“If the cliff is avoided, we still run the risk of damaging confidence with a resolution pushed against year-end deadlines,” said Dr. Alex Villacorta, Clear Capital’s director of research and analytics. “The sooner businesses and consumers are reassured, the more likely they are to build, purchase, or loan on a house.”

Clear Capital, based in Truckee, Calif., provides asset valuation and risk assessment for large financial services companies.

Steady price increases, combined with greater home sales and rising builder confidence, suggest the housing recovery may be sustainable.

Other measures of home prices have also increased. The Standard & Poor’s/Case Shiller index rose in July compared with a year ago, the second straight yearly increase after two years of declines. And an index compiled by a federal housing regulator has also reported annual increases.

Housing prices are rising in most areas, according to CoreLogic. Only 20 large cities out of 100 tracked showed declines in the 12 months ending in August. That compared with 26 in July.

“The housing market’s gains are increasingly geographically diverse with only six states continuing to show declining prices,” said Mark Fleming, chief economist for CoreLogic.

States with the biggest price increases in the past 12 months were Arizona, Idaho, Nevada, Utah and Hawaii. Prices soared 18.2 percent in Arizona, partly because the supply of homes for sale is low and foreclosure sales have slowed. Prices have risen 10.4 percent in Idaho.

The states with the biggest declines were Rhode Island, Illinois, New Jersey, Alabama and Connecticut.

The housing market has begun to rebound this year more than five years after the bubble burst.

Sales of previously occupied homes jumped in August to the highest level since May 2010. The rate at which builders started single-family homes rose last month to the fastest in more than two years. Builders have also increased their spending on single-family home construction for five straight months. And the lowest mortgage rates on record have made home buying more attractive.

Even with the gains, the housing market has a long way back. Many would-be buyers can’t qualify for stricter lending standards or save enough money for larger down payments that most banks now require. Home sales, housing starts and prices all remain below healthy levels.

CoreLogic said its measure of prices is 26.7 percent below a nationwide peak in April 2006.

Still, the broader economy will likely benefit from rising home values. When prices rise, people typically feel wealthier and spend more. And more Americans are likely to put their houses up for sale, which could further energize the market.