Home prices plummeted anew with a record decline of 15.8% in May from the same month last year. This was according to the S&P/Case-Shiller Home Price Index of 20 cities. Prices dropped 0.9% from April to May. The drop was the 22nd consecutive month of decline recorded by the index. Prices

All of the 20 metro areas covered by the index registered annual declines; nine experienced record lows and 10 cities posted double-digit drops.

The Case-Shiller 10-city Index registered a year over year decline of 16.9%, and a 1% month over month dip. Both the 10-City Composite Index and the 20-City Composite Index reported record annual lows.

"Since August 2006, there has not been one month where we have seen overall price increases, as measured by the two Composites," said David Blitzer, Chairman of the Index Committee at Standard & Poor's.

Case-Shiller has been looking after the 20-city index for 19 years, while the 10-city index is 21 years old. The continuing declines have been exceptional as in terms of length of time the index was decreasing at the same time because of the record index lows.

The last time an extended decline was recorded was in April 1990, when the 10-city index sank for 10 consecutive months. But that total loss was just 6.5%.

Since the 10-city index peaked in July 2006, it has dipped 19.8%. The 20-city dropped 18.4% from the peak.

The 20-city index's Sun Belt cities, which recorded the biggest price increases during the boom, have led the price drop. Las Vegas prices have declined 28.4% during the past 12 months; Miami homes lost 28.3% of their value; and Phoenix process dropped 26.5%.

Homes in the midwest metro areas like Detroit have lost 17.4% of their value for the 12 months while Cleveland 8%.

Prices in northeast cities like Boston, dropped 6.2% for the 12 months while in New York, prices dropped 7.9%.

The smallest year-over-year declines were recorded by Charlotte, N.C. with a decline of 0.2%, Dallas -- by 3.1%, and Denver by 4.8%. 

New home sales fell in June for the seventh time in the past eight months, according to a government report released Friday.

The Commerce Department reported Friday that sales of new single-family homes last month declined 0.6% to a seasonally adjusted annual rate of 530,000 units from May's performance of 533,000 units. The June figure was above the economists' expectations of 505,000.

Analysts noted that sales were up in two of the four regions of the country, an indication that the rock bottom of home sales is drawing to a close.

Sales largest declines were in the South, by a 2 percent drop, while in the West by 0.9 percent. These declines were offset somewhat by sales increases of 5.3 percent in the Northeast and 2.5 percent in the Midwest.

The nation is enduring a steep downturn in housing that has pushed the overall economy close to a recession. It has also triggered a severe credit crunch, forcing U.S. financial institutions to cope with billions of dollars of losses from bad mortgage loans.

The report on new home sales showed that the median price of a new home sold in June fell by 2 percent compared to a year ago.

The median sales price of new houses sold in June 2008 was $230,900, which is 1.4% higher than the revised median sales price of $227,700 in May.

Despite the monthly sales decrease, economists and investors reacted favorably because the upward revisions in previous months showing a stronger market than previously perceived.

The Census Bureau figures showed that the percentage of vacant homes available for sale during the second quarter of this year was 2.8%. This is a little less than the previous quarter's figure and is still near record highs.

The figure includes homes which were empty and on the market from April through June but excludes rental properties. The vacancy rate hit a record high of 2.9% in the first quarter of 2008. It was 2.6% during the same period last year.

The South had the highest vacancy rate at 3.2% and the Northeast had the lowest at 1.9%. The West had the largest year-over-year jump, to 2.8% from 2.3%.
 

The National Association of Realtors reported that sales by homeowners dipped further in June to an annual pace of 4.86 million, down 2.6% from a pace of 4.99 million in May.

The fall was beyond what was expected and it is the lowest rate recorded since the first quarter of 1998 when the home sales fell to an annual pace of 4.83 million.

The existing home sales rate which includes single-family, town homes, condominiums and co-ops - is down 15.5% from the 5.75 million units sold in June 2007.

With inventory still above normal levels, it is seen that home prices will continue to decline. The number of homes available for sale at the end of June increased 0.2% to 4.49 million, which represented an 11.1-month supply of inventory at the current sales pace, up from a 10.8-month supply in May.

Meanwhile, the median price of a home sold in June fell to $215,100, down 6.1% from $229,000 a year earlier.

Sales of single-family homes declined 3.2% to an annual rate of 4.27 million in June from 4.41 million in May. That's 14.8% below the 5.01 million-unit pace in June 2007.

The median existing single-family home price was $213,800 in June, down 6.7% from a year ago.

According to Lawrence Yun, NAR’s chief economist, "About four in 10 homes are purchased by first-time buyers, which frees existing owners to trade up."

In the West, existing-home sales rose 1.0% in June, but were 6.4% lower than the June 2007 figure. This can be attributed to the buyers were attracted to bargain prices, which are down 17.2% from June 2007.

Existing-home sales in the south was down by 3.1% from May to June, and 18.1% from a year ago. Home prices in the area have only fallen 2.4% from a year ago.

Midwest existing-home sales fell 3.4% in June, and dipped 17.6% year-over-year. But the median price there actually increased by 2.8% from June 2007.

In the Northeast, existing-home sales declined 6.6% on a month-to-month basis and dipped 15.8% from June 2007. The median price declined 12.6% below June 2007. 

The mortgage rates increase this week. Freddie Mac released the results of its weekly Primary Mortgage Market Survey (PMMS) wherein the 30-year fixed-rate mortgage (FRM) averaged 6.63 percent with an average 0.6 point for the week ending July 24, 2008, up from last week when it averaged 6.26 percent. Last year at this time, the 30-year FRM averaged 6.69 percent.

The 15-year FRM this week averaged 6.18 percent with an average 0.6 point, up from last week when it averaged 5.78 percent. A year ago at this time, the 15-year FRM averaged 6.37 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.16 percent this week, with an average 0.7 point, up from last week when it averaged 5.80 percent. A year ago, the 5-year ARM averaged 6.30 percent.

One-year Treasury-indexed ARMs averaged 5.49 percent this week with an average 0.5 point, up from last week when it averaged 5.10 percent. At this time last year, the 1-year ARM averaged 5.69 percent.

"Market concerns about rising inflation, further weakness in the housing market and greater probability that the Federal Reserve (Fed) will raise short-term rates this year all combined to push mortgage rates higher this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Some of the key drivers to these concerns were consumer prices jumping 1.1 percent (annualized) in June – the largest increase since September 2005 on a year-over-year basis – coupled with consumer prices growing at a 5.0 percent clip (on a year-over-year basis), the strongest since February 1991.

"Additionally, home prices fell 4.8 percent between May 2007 and 2008, according to the Office of Federal Housing Enterprise Oversight's monthly house price index. And new construction of one-unit homes fell to 604,000 units (annualized) in June, the slowest pace since January 1991."