Price of homes drops at fastest rate since '87

NEW YORK - U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's Corp. began its nationwide housing index in 1987, the research group said yesterday.

One of the architects of the index, MacroMarkets L.L.C. chief economist Robert Shiller, said the declining residential real estate market "shows no signs of slowing down."

The report came a day after the National Association of Realtors said sales of existing homes dropped for a fifth straight month in July, while the number of unsold homes shot up to a record level.

The S&P/Case-Shiller quarterly index tracks price trends among existing single-family homes across the nation compared with a year earlier.

A separate index by the same team that covers 20 U.S. cities fell 3.5 percent in June from a year earlier. A 10-city index fell 4.1 percent from a year earlier. Philadelphia was not part of either of the city indexes.

Fifteen of the cities surveyed for S&P's 20-city index showed a year-over-year decline in prices in June.

Prices in Boston dropped in June at a slower rate than they did in May, continuing a trend that started at the beginning of the year. In April 2006, Boston was the first metropolitan area to show a year-over-year decline, so any turnaround there could be an early sign of recovery.

S&P said it needed more data to determine whether Boston would be the first area to improve.

Detroit led the cities with the biggest price declines, with an 11 percent drop from June of last year. Other surveyed cities with falling prices included Tampa, Fla.; San Diego; and Washington, which all recorded drops of at least 7 percent.

Seattle and Charlotte, N.C., were on the small list of cities that saw prices rise in the same period. Seattle prices rose 8 percent in June, while Charlotte saw a 6.8 percent increase.