Information courtesy of MSN online

Home prices take record drop

Average home prices fell in 43 states during the past quarter, according to a government index, with California and Nevada taking the biggest hits.

The broadest measure of housing prices nationwide showed a record drop last quarter, falling in 43 states. Bearing the brunt were California and Nevada, where prices fell more than 8% from the end of December through March.

The government's 292-city index of home purchase prices, which typically offers a less pessimistic view of buying trends than narrower measures, fell 3.1% from March 2007 to March 2008, 1.7% in the first quarter of 2008 alone. That's a record.

The worst losses were in California and Nevada, where problems were focused in new suburbs where, in response to fast-growing prices a few years ago, builders quickly threw up far more homes than buyers would eventually want. Some areas surrounding Las Vegas and California's Central Valley and the newly developed suburbs around San Diego and other Southern California cities are disaster zones. In Merced, Calif., homes lost a quarter of their value over the last year. Most of California's coastal areas held up much better. The San Francisco area lost 3.3% of value in the past year; San Jose and Silicon Valley prices fell 3.6%.

Mortgage rates are also at a 40 year low, making this a great time to jump into the market.