Home prices plunge setting record

Home prices fell by a seasonally adjusted 1.7% in the first quarter, marking the largest quarterly decline on record, according to data from the Office of Federal Housing Enterprise Oversight that was released on Thursday. That performance is down 3.1%, compared with the level from a year earlier, marking the largest drop in the index’s 17-year history. Prices lost ground in 43 states, according to the OFHEO. Eight states had quarterly price drops of more than 3%, while prices in California and Nevada fell by more than 8%. On the positive side, the states with the greatest price appreciation were Wyoming, with a 6.3% gain, and Utah with a 5.6% gain. “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 in a statement. "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."