Home prices drop; 49 states see prices fall

WASHINGTON (Reuters) - Home prices posted a second consecutive quarterly drop in the fourth quarter, with every state except Maine recording lower prices, the Office of Federal Housing Enterprise Oversight said on Tuesday.

Compared with the third quarter of 2007, house prices fell by 1.3 percent, the housing finance company regulator said in a statement on its Web site.

Home prices have fallen 0.3 percent since the fourth quarter of 2006 as declines in the most recent quarter erased earlier gains. That represents the first four-quarter decline in home values since OFHEO began its survey in 1991.

"While the market weakness is most significant in areas that saw the greatest price run-ups during the (housing market) boom, other states have clearly not been immune to recent declines," OFHEO director James Lockhart, said in a statement.

OFHEO said the data now represents new home purchases, rather than all transactions as it had done in previous quarterly reports. This would better reflect trends in national home prices because 'all transactions' includes appraisals for refinancings, said OFHEO senior economist Andrew Leventis.

The decline for the fourth quarter was much greater than the 0.3 percent price decline that was seen between the second and third quarters of last year. The all transactions decline from the second to third quarter of last year was 0.4 percent.

The OFHEO data involves homes whose mortgages are valued at $417,000 or below, as it measures variations in the values of loans that can be financed by Fannie Mae and Freddie Mac. Under today's guidelines, those are loans valued at $417,000 or below.

(Reporting by Patrick Rucker; Editing by Chizu Nomiyama)