National home prices posted a record drop in the first quarter, according to mortgage finance giant Freddie Mac (FRE), which said late Thursday that its index of conventional mortgage purchases — the Conventional Mortgage Home Price Index, or CMHPI — registered an annualized 10.4 percent drop in the first quarter of 2008. On a rolling four-quarter basis, conforming home sales prices fell an average of 4.4 percent — the largest annual fall in values over the 39-year history of the GSE’s data series. The GSE doesn’t include appraisals in CMHPI calculations, but it said that adding in appraisals served to mute the decline in prices; home values fell 2.4 percent nationally during the first quarter on an annualized basis when looking at both appraisals and purchases — still the steepest such quarterly decline recorded since 1971. And over the year ending with the first quarter, home values depreciated 0.8 percent on average when including both purchase and refinance transactions — the first such annual drop in index history.

“Particularly striking has been the depth and breadth of home-value decline across the U.S.,” said Frank Nothaft, Freddie Mac vice president and chief economist. “In the CMHPI Purchase-Only Series we saw all nine regions of the country experience price declines at the same time, though to different degrees.” Price weakness widespread, California leading the way Forty-six states registered price declines in the first quarter, Freddie said, and 29 states had declines measured from the same time a year ago, according to the CMHPI purchase-only data. Montana, North Dakota, South Carolina and Wyoming were among the few states that psoted modest price gains during the first quarter — in general, states in which the local economy has remained more vibrant tended to have better home-value performance relative to other states. Based on annualized quarterly growth rates in the CMHPI Purchase-only series, the West South Central states — Arkansas, Louisiana, Oklahoma, and Texas — showed the smallest decline in home sales prices over the first quarter, at a –1.9 percent rate. Three regions showed double digit declines, including the South Atlantic region, which includes Florida, at –10.1 percent; and the New England region, which includes Massachusetts, at –11.0 percent. The nation’s worst performing region in the first quarter was the Pacific, which includes California, at an average price drop of –24.8 percent, Freddie Mac said. For more information, visit http://www.freddiemac.com. Disclosure: The author held no positions FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.