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Home prices decline during first quarter

Home prices during the first quarter of 2011 were down.

Home prices during the first quarter of 2011 were down.

For those considering relocation, the latest data released by the Federal Housing Finance Authority might come as good news.

The Washington-based agency reported that home prices in the U.S. fell 5.5 percent during the year's first quarter. The drop is significant, as economists had projected a much smaller decline of 1.2 percent prior to the report's release.

The FHFA's report is based upon the prices of properties backed by either Fannie Mae or Freddie Mac. The decline during the year's first several months represents the 15th straight quarter in which home prices fell, as more foreclosures, short sales and discounted-price sales took place. In fact, sales of properties for less than their loan's current value accounted for 38 percent of all property sales during the quarter, a recent report from the National Association of Realtors discovered.

"Dumping foreclosures on the market and selling them at distressed prices affects the whole real estate market," Richard DeKaser, an economist at Parthenon Group in Boston, told Bloomberg. "It puts downward pressure on prices, even for homes that aren’t in foreclosure."

Due to the cheaper properties available on the market, sales for new single-family homes increased during April. For those not still hampered by the recession, the real estate market has become very affordable.