S&P home index drops, 1st time since '91

[May 30, 2007]  NEW YORK (AP) -- U.S. home prices fell 1.4 percent in the first quarter compared to a year ago, the first time since 1991 prices have shown a quarterly decline, according to a housing index released Tuesday by Standard & Poor's.

"We still don't see anything that looks like a clear bottom," S&P index committee chairman David Blitzer said. "We're still headed down."

The S&P/Case-Shiller U.S. National Home Price Index showed the 1.4 percent drop in the price for sales of existing single-family homes in metropolitan markets in nine U.S. census divisions.

For March, S&P's 10-city and 20-city composite indexes, which measure a smaller number of cities than the national index, also fell, by 1.9 percent and 1.4 percent respectively over the last year.

When compared to February, the March sales figures show that 16 of 20 cities reported prices had dropped or remained flat, S&P said.

Boston, Detroit, San Diego and Washington, D.C. showed the greatest year-over-year declines in prices. Meanwhile, Charlotte, N.C., Seattle and Portland, Ore. had strong price appreciation over last year. Compared to February, the gains in those cities were more modest.

Housing is watched by Federal Reserve governors as one of the most important indicators of overall economic health because of its pull on consumer spending and construction activity.

On May 9, Fed governors held the benchmark interest rate in place at 5.25 percent, keeping the prime interest rate used by commercial banks at 8.25 percent, which adds stability and is good for borrowers. The Fed last raised rates in June 2006.

[Text copied from file received from AP Digital; article by Vinnee Tong, AP business writer]