House Prices Drop in Q1

From Bloomberg:

. . . .The value of a house dropped 1.4 percent in the first three months of the year from the same period in 2006, according to a report today by S&P/Case-Shiller. Prices last fell during the third quarter of 1991. . . .

. . . . A recovery in housing is being held back by a wave of subprime mortgage defaults, which is throwing homes back onto the market and prompting banks to tighten lending standards for borrowers with poor or limited credit histories.

``These data are probably only just beginning to reflect the impact of problems in the subprime mortgage market,'' said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, in a report to clients. ``Further declines seem likely.''