Home prices posted a sharpest decline in its 17 year history. The Office of Federal Housing Enterprise Oversight (OFHEO) said Thursday that home prices fell 3.1 percent in the first quarter compared with last year.

The home-price index is considered to be the most comprehensive reading of the U.S. market. Falling home prices were greatly experienced in California, Florida and Nevada.

This is the second quarter that a price decline was experience on a year-over-year basis when the first one was in the final quarter of 2007, when it dropped 0.45 percent.

Prices fell in 43 states, with California and Nevada exhibiting the sharpest drops. Home prices declines where more than 8 percent in the said states.

The government index also fell 1.7 percent from the fourth quarter of 2007 to the first quarter of 2008, the largest quarterly price drop on record.

“The large overhang of real estate inventory awaiting sale continues to force price declines in many areas, but particularly in places that had seen very sharp appreciation,” Patrick Lawler, the agency’s chief economist, said in a prepared statement.