INSTANT VIEW: June US home prices plunge from year ago

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged a record 15.9 percent in the second quarter from a year earlier, surpassing the steep drop in the first quarter, according to the Standard & Poor's/Case Shiller national home price index reported on Tuesday.

KEY POINTS:

* The S&P/Case Shiller composite index of 20 metropolitan areas slipped 0.5 percent in June from May, bringing the measure down 15.9 percent from June 2007.

* S&P said its composite index of 10 metropolitan areas slipped 0.6 percent in June versus May, for a 17.0 percent year-over-year drop.

COMMENTS:

MARC PADO, U.S. market strategist, Cantor Fitzgerald & Co. Technical analyst:

"We're probably getting to a point where at least the median price is starting to spur on some buying interest and that's the first step-- prices getting down to a level."

"When we remove that inventory, we're going to start to see some real improvement, but we don't expect that to happen until the first (quarter) of '09."

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:

"Prices are still falling but at a progressively lesser pace, this is the slowest decline since last July. It seems that some areas are now finding a base. It is reasonably encouraging in that it suggests that some parts of the problem are more localized now."

MIKE MORAN, CHIEF ECONOMIST, DAIWA SECURITIES, NEW YORK:

"I thought it was a reasonably good report on the housing market. We had a much smaller rate of decline than we had in prior months. We also had several cities that showed noticeable increases in price. The price declines were concentrated in the cities that were unusually robust during 2005 and 2006 and you should expect price adjustments in those markets."

GARY SHILLING, PRESIDENT, A. GARY SHILLING & CO, SPRINGFIELD, NEW JERSEY:

"It's more of the same. We are looking for the Case-Shiller measure to eventually show a 40 percent total decline, peak to trough. The key point is we are a long way from bottoming out. The bulls keep hoping otherwise, but the basic problem is excess inventories. They are the mortal enemy of prices. That's true of any goods-producing sector and certainty is true of housing. We estimate that 2 million houses were built during the boom, and we've only worked that excess down to 1.8 million as of the beginning of 2008. We think we will see prices falling until the fourth quarter of 2010. There will be a lot more write-downs at financial institutions and a lot more problems for consumers. They have run out of borrowing power, principally because they can no longer rely on home equity."

MARKET REACTION: