UPDATE 1-U.S. home prices fell in July vs June - OFHEO

(Adds data, report details, byline)

By Julie Haviv

NEW YORK, Sept 23 (Reuters) - U.S. home prices fell 0.6 percent in July from June, the fastest drop in three months which sent home values to the lowest since about the end of 2005, according to a government report on Tuesday.

Over the 12 months ending in July, U.S. home prices fell 5.3 percent, according to the seasonally adjusted monthly House Price Index from the Office of Federal Housing Enterprise Oversight.

A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices, bringing the cumulative decline since the April 2007 peak to 5.8 percent, according to the report.

Home prices fell a revised 0.3 percent in June from May, which OFHEO originally reported as unchanged. The decline in July was the sharpest since a 0.8 percent drop in April.

Prices fell in all regions, ranging from a decline of 1.1 percent in the Middle Atlantic states of New York, New Jersey and Pennsylvania to a drop of 0.1 percent in the West North Central states of North Dakota, South Dakota, Minnesota, Nebraska, Iowa, Kansas and Missouri, the report said.

The OFHEO index is calculated using purchase prices of houses financed with mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. The index was introduced in the fourth quarter of 2007 and has shown less severe declines in prices than other reports.

For example, the Standard and Poor's S&P/Case-Shiller 20-City Composite Home Price Index slipped 0.5 percent in June from May, bringing the measure down a record 15.9 percent from June 2007.

However, the month-over-month drop in the 20-city index was the smallest since July 2007. S&P will release its July figures on Sept. 30.

OFHEO's report precedes separate data this week gauging the state of the U.S. housing market, currently suffering the worst downturn since the Great Depression of the 1930s.

The National Association of Realtors will release data Wednesday on U.S. sales of existing homes in August. The Commerce Department will release data Thursday on U.S. sales of new single-family homes in August.

The OFHEO report is found on Web site www.ofheo.gov. (Additional Reporting by Richard Leong; Editing by Tom Hals)