Home prices have sunk to 2002 levels, effectively wiping out almost a decade’s worth of home equity across the U.S. and imperiling the fragile economic recovery as Americans confront the sinking value of their biggest investment.
A closely watched home-price index released Tuesday showed that prices nationwide fell 4.2% in the first quarter after declining 3.6% in the fourth quarter of 2010. Home prices, which slid in March to their lowest level since the start of the 2006-2009 downturn, have tumbled for eight straight months, according to the S&P/Case-Shiller home-price index.
“Home prices continue on their downward spiral with no relief in sight,” said David M. Blitzer, chairman of S&P’s index committee. The report signals “a double dip in home prices across much of the nation,” he said.