According to the Office of Federal Housing Enterprise Oversight, U.S. home prices fell at an annualized rate of 6.92 percent in the first quarter this year—the biggest decline in the index’s 17-year history.
Due to falling home prices, many homeowners have mortgage debts exceeding their homes’ value. This leaves them unable to take money out of their homes or refinance when subprime rates increase, exacerbating already unprecedented foreclosure rates.
Other indices also show steep declines over the past year. The 10-city Case-Shiller composite index dropped 8.8 percent and the 20-city composite index dropped 7.4 percent. According to the National Association of Realtors, the nationwide median price of single-family homes fell 7.7 percent since last year.
The biggest declines were in California, Nevada and Florida where prices have fallen 12, 11 and 8 percent respectively.
