Case-Shiller shows home price plunge

The S and P/Case-Shiller Home Price Index for the U.S. housing market came out yesterday and the news was not good. MarketWatch said:

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. Read full report.

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. See full story.

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. See full story.

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.

Obviously, prices may have much further to fall given the chart of the day I showed today and yesterday.