Home prices plunge at record rate in 2007: S&P

By Julie Haviv

NEW YORK (Reuters) - The collapse in home prices accelerated to a record pace in the fourth quarter of 2007, with prices plunging 8.9 percent last year, according to a national home price index released on Tuesday.

The quarterly drop in prices of existing single-family homes quickened to 5.4 percent in the final three months of last year from a 1.8 percent drop in the third quarter, according to the S&P/Case-Shiller U.S. National Home Price Index, Standard & Poor's said in a statement.

The 8.9 percent year-over-year decline was the largest in the 20-year history of the index, as housing was pressured lower by a huge supply of homes for sale, rising foreclosures and tighter lending conditions.

By comparison, during the 1990-91 housing recession the annual rate bottomed at a 2.8 percent drop.

The composite index of 10 of the largest metropolitan areas fell 2.3 percent in December versus November and tumbled 9.8 percent year-over-year, which set a new record.

The composite index for 20 metropolitan areas fell 2.1 percent in December from November and sank 9.1 percent year-over-year.

"We reached a somber year-end for the housing market in 2007," Robert Shiller, professor at Yale University and chief economist at MacroMarkets LLC, said in the statement.

Shiller, co-developer of Standard and Poor's S&P/Case-Shiller Home Price Indices, said home prices across the nation and in most metro areas are significantly lower than where they were a year ago.