Index Shows Accelerated Nationwide Value Declines.

McLean, VA-Freddie Mac's Conventional Mortgage Home Price Index Purchase-Only Series, which excludes all refinancings, marked the largest annual decrease in its 39-year history in 2008.

It showed a 17.9% annualized decline in U.S. house prices during the fourth quarter of 2008, following a downward revised 8% annualized drop in the third quarter.

Depreciation is also reflected in the fact that over the year home sales prices fell an average of 9.5% in the CMHPI Purchase-Only Series.

"The deepening recession and the large inventory of for-sale homes continued to push home values down," said Frank Nothaft, Freddie Mac vice president and chief economist.

"While historically low interest rates on long-term fixed-rate mortgages help the housing market, demand for homes was weakened by rising unemployment, wealth declines from declining stock market valuations and general lack of consumer confidence."

For the second consecutive quarter, the index shows that "every region of the nation experienced flat or declining home values," he said. Yet, the fourth quarter "marks the first time that year-over-year declines in home values were recorded in each of the nine regions of the country."

Mr. Nothaft noted, however, that "the range was wide," with the West South Central Division experiencing declines of one-tenth of 1% over the year while the Pacific Division had a decline of 23%.