Home Prices Fall at Record Rate

US home prices experienced an unprecedented slide in April since the S&P/Case-Shiller home price index began in 2000 with every top metropolitan area now posting annual losses and a sizeable percentage of them showing double -digit decline.

The S&P/Case-Shiller home price index dropped 15.3 percent from a year earlier, less than forecast, after a 14.3 percent decline in March. The 20-city index is based on data that goes back 19 years, while the 10-city index is 21 years old.

The composite index of 10 metro areas fell 1.6% in April, resulting in a record 16.3 percent annual drop. Home prices in 12 of the metro areas have fallen for eight consecutive months.

The fall in home prices is further exasperated by mounting mortgage defaults, foreclosures and stringent loan rules that make it more difficult for prospective buyers to get financing.

Despite the gloomy outlook, the figures were better than analysts expected, with the 20-city index expected to fall 2 percent for April and 15.9 percent from the previous year.

The figures quickly follow comments made by US Treasury Secretary, Henry Paulson who sees an end to the housing decline in sight.

"Hopefully the biggest part of the housing decline will be over by the end of the year," he said.