US home prices tumble by record amount

US house prices fell by a record annual amount in the final three months of last year, two housing indexes showed today.

Meanwhile the pace of decline continued to accelerate in all but a handful of cities.

The farther prices fall, the fewer home owners may be able to qualify for President Barack Obama’s mortgage relief plan.

Last week, the president estimated up to five million borrowers in good standing who are current on their payments but owe from 80% to 105% of their home’s value would be able to refinance into a lower interest-rate loan.

Although details of the plan will not be released until March 4, almost 14 million US homeowners are in negative equity, according to Moody’s Economy.com.

Nationally, home prices have receded to 2003-levels, and half of the urban areas in the 20-city Case-Shiller Home Price Index have lost more than 20% of their values from their peaks in 2006, including Las Vegas, Phoenix and Miami.

Americans are feeling grim about the prospects of any turnaround. Consumer confidence index sank to new lows in February as huge job cuts, shrinking retirement accounts and plunging home prices fuelled fears.

The Standard & Poor’s/Case-Shiller US National Home Price Index plunged 18.2% during the final quarter of last year from the same period a year ago, the largest drop in its 21-year history.

Meanwhile, the Federal Housing Finance Agency said today that home prices dropped 8.2% from a year earlier, its largest annual decline on record since 1991.

The reports did offer some good news. The rate of annual price declines moderated in Boston, Denver, Los Angeles, San Diego and Washington, according to the Case-Shiller index, while cities in Washington, North Dakota and Texas posted year-over-year quarterly gains, the government said.

But Phoenix, Las Vegas and San Francisco all saw home values lose more than 30% in December, the Case-Shiller index said. And the government index showed many California and Florida cities clocked their worst declines in the fourth quarter.