Index: Home Price Declines Accelerating

The decline in house prices continued to accelerate in January, as prices fell to a level that was down 10.7% nationally over the previous 12 months, according to Standard & Poor's/Case-Shiller housing price index, which tracks home sales in 20 metropolitan statistical areas. The December report indicated that house prices declined by 9.1% in 2007, and it appears that the biggest declines are occurring in lower-priced homes that likely were financed with subprime loans. "This is the first national decline in house prices," Professor Karl Case said, adding that the "subprime phenomenon" is an important contributing factor. Lower-tier homes (priced at less than $157,248) in 15 of 17 cities posted the largest percentage increase in house prices since 2000, the Wellesley College economics professor said. But the lower-priced homes also have seen the greatest decline in prices since the peak. "It will clearly take those markets a long time to recover," Mr. Case said during a conference call. Separately, the Office of Federal Housing Enterprise Oversight reported that home prices fell 1.1% in January on a seasonally adjusted basis. "For the 12 months ending in January, U.S. house prices fell 3%," OFHEO said.