Case-Shiller home price index shows 1.4% YOY drop

It's not much of a surprise, given what we already know about the state of U.S. housing from the National Association of Realtors and the Census Bureau. But the S&P/Case-Shiller home price index (PDF link) showed further declines in house prices in March ...

* The U.S. composite index, which tracks the performance of home prices in 20 top metropolitan areas, declined 0.31% from February and 1.36% from March 2006.

* 13 of 20 metros showed year-over-year price declines, with Detroit the worst off (-8.38%) and San Diego (-5.97%), Boston (-4.86%), and Washington D.C. (-4.78%) closely behind. A pair of cities in the Pacific Northwest (Portland and Seattle at +6.98% and 10.02%, respectively) were among the strongest gainers, along with Charlotte (+7.44%).

* For the first quarter as a whole, prices dropped 1.41% from the same quarter a year earlier. As this chart shows, that's the sharpest YOY price deterioration since Q2 1991 (-2.19%)

Unlike past downturns in U.S. home prices, which were driven by economic recession or sky-high interest rates, this decline is a side effect of the bursting of a large speculative bubble. That makes the current experience unique, more akin to a "housing version" of the dot-com bust. I expect pricing to remain weak at least into 2008, given the very large inventory glut in the market right now.