Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Home prices post record decline

A government study finds home prices fell 1.7% in the first quarter of 2008. California, Nevada see sharpest drop.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Beth Braverman, CNNMoney.com contributing writer

housing2.03.jpg
Compared to the first quarter of 2007, home prices fell 3.1% in the first quarter of 2008.

Washington, D.C. -- The prices of homes sold in the first quarter of 2008 posted a record decline, according to a new report from the Office of Federal Housing Enterprise Oversight.

Home prices fell 3.1% from the first quarter of 2007, the largest decline in the purchase-only index, which excludes refinancings, since the agency began keeping records 17 years ago.

First-quarter prices dropped 1.7% from the fourth quarter, the largest quarterly dip ever.

"It's not going to be the largest decline on record for long," said Peter Schiff, president and chief global strategist at Euro Pacific Capital."Prices are going to keep falling until we get to the equilibrium, which is much, much lower. This is only the beginning."

The inflation-adjusted price of homes fell 7.7% on a year-over-year basis. At the same time, the prices of other goods and services rose 4.6%, according to OFHEO.

"The nominal price declines aren't as spectacular as they would be if we didn't have so much inflation," Schiff said. "Houses are becoming a less valuable asset relative to the cost of living."

OFHEO reported that prices fell in 43 states, with eight states seeing quarterly price declines of more than 3%. California and Nevada were the biggest losers, with home prices falling more than 8% in both states.

Prices on all transactions, including homes sales and refinancings, fell 0.2%year-over-year and remained flat compared to the fourth quarter, OFHEO reported.

California, Nevada, Florida, Arizona and Michigan exhibited the greatest price depreciation in all transactions in the first quarter. Wyoming, Utah, Montana, Texas and Alabama saw prices for all transactions increase the most. To top of page

Find mortgage rates in your area


Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
Best cars for the super-rich The Robb Report has selected these as the best new cars and SUVs for anyone who doesn't have to worry about how much they spend. More
Banned! 10 things you won't find in China China says it wants to open its economy more to the rest of the world, but Beijing keeps a tight grip on technology and access to media. These 10 items are still off limits. More
A morning at the AltSchool, an education startup that Silicon Valley is crazy about The AltSchool is a system of "micro schools" and an education software maker that has raised about $133 million from investors like Andreessen Horowitz and Mark Zuckerberg and Priscilla Chan's philanthropic fund. More