U.S. Home Prices Drop More Than 3 Percent in the First Quarter

Washington, D.C.–U.S. home prices showed the most severe decline in 17 years, the Washington, D.C.-based Office of Federal Housing Enterprise Oversight said Thursday.Home prices dropped 3.1 percent in the first quarter compared to 2007 and fell in 43 states; the OFHEO index also declined 1.7 percent from 2007’s fourth quarter to the first quarter of 2008–the largest quarterly price drop in history, according to The Wall Street Journal.”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.”Quarterly price declines of more than 3 percent occurred in eight states. California and Nevada, where prices fell more than 8 percent, had the biggest deterioration.