The Case-Shiller home price index fell sharply in February. The 20-city index dropped significantly by 2.6% in February, which is not annualized. The index's fall has accelerated from the 2.3% drop in January and the 2.1% dip in both November and December. According to RBS Greenwich Capital, that works out to a 24% annualized home prices drop in the 20 cities measured for the November to February period. February marked the sixth consecutive month where every one of the 20 cities posted a monthly home price decline, said RBSGC analysts. Las Vegas, Phoenix, Miami, and all of the major cities in California registered the sharpest dips, the firm reported.

Given the "alarming data," RBSGC said that "it might be helpful to step back and try to put the current developments into perspective." Analysts said that home prices rose far faster than income over the 2003 to 2006 boom period, making homes much less affordable on average and "downright unaffordable for many." They explained that  this, in turn, pushed lenders, builders, and buyers to become more creative and permissive, leading to the cohorts of bad loans that are now coming home to roost. This is why during this time of a precipitous fall in home prices, it might be helpful to mark up a progress report on home prices relative to income, analysts said.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.