The following is a report from MarketWatch dated May 27, 2008.
WASHINGTON (MarketWatch) - The pace of home price declines accelerated in March and there are no hints that the decline might be ending soon, economists said.
Greg Robb is a senior reporter for MarketWatch in Washington.
Home prices in 20 major U.S. metropolitan areas have dropped a record 14.4% in the past year, Standard & Poor's said Tuesday.
The 20-city Case-Shiller home price index fell 2.2% from February to March. This is the 16th consecutive decline in prices.
And for 10 major cities, prices fell by 2.4% in March and by 15.3% for the past 12 months.
S&P's Case-Shiller index tracks sales of the same homes over time, so it's not influenced by the mix of homes sold in a period. However, it closely tracks only 20 cities, many of which had participated in the housing bubble earlier in the decade. .
A separate index released last week by the Office of Federal Housing Enterprise Oversight showed a much smaller 1.7% decline in prices in the first quarter. In the OFHEO index, prices fell 0.4% during March.
The OFHEO index covers more areas but only includes mortgages that conform with Fannie Mae and Freddie Mac standards.
Falling prices have eroded Americans' wealth.
On Friday, the National Association of Realtors reported that existing home sales fell 1% in April.
According to the Case Shiller index, just over half of the metro areas are experiencing a double-digit drop in home prices, with home prices down over 20% in six areas.
The sharpest decline has been in the formerly bubble areas such as Las Vegas, Miami and Phoenix.
Some economists welcome the drop in prices, saying that the sooner the price declines play out, the quicker that the bottom of the housing market will be reached.
But there's also concern that prices might overshoot on the downside, hurting banks and financial-services firm and hamstringing the economy.
Economists at Lehman Brothers expect national Case Shiller prices to fall an additional 10% through the end of 2009.
"Inventory of existing homes is still very close to its record high so prices will continues to fall rapidly," agreed Ian Shepherdson, U.S. economist at High Frequency Economics.
In a separate report, new homes sales rose 3.3% in April, but economists said it was just a rebound after a steep 11% drop in March.
In addition, the Conference Board reported that consumer confidence slid again to a 16-year low in April.
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