Home Price Decline Largest on Record

Washington, DC, May 22, 2008--House prices fell a seasonally adjusted 1.7 percent in the first quarter, the largest quarterly price decline on record, the Office of Federal Housing Enterprise Oversight said.

Prices fell in 43 states, according to the agency. Prices were down 3.1 percent between the first quarter of 2007 and the first quarter of 2008, OFHEO's data showed. That drop is the largest in the index's 17-year history.
 
"For homeowners and financial market observers, these declines spell further erosion in home equity levels and potentially more trouble for mortgage markets," said James Lockhart, OFHEO director.

"To prospective home buyers who have been shut out of homeownership because of affordability constraints, these declines may be welcome news, as are continued low mortgage rates."

Eight states had price erosion of more than 3 percent, while in California and Nevada prices fell more than 8%.