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First American: Inflation hurts home prices

Index shows 37 states with declining prices

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Year-over-year declines in national home prices have stabilized in the 10 to 11 percent range, but price declines are accelerating when inflation is taken into account, according to a new analysis by First American CoreLogic. The First American CoreLogic June 2008 LoanPerformance House Price Index shows home prices down 10.7 percent in June from a year ago. The index concludes that between April and June home-price declines were flat, falling by an average of 10.8 percent. But factor in inflation and real home-price declines accelerated from 15.3 percent in April to 16.8 percent in June. "Given the surge in inflation, real inflation-adjusted home prices are still declining at a faster rate," said Mark Fleming, chief economist for First American CoreLogic, in a press release. Fleming said even without factoring in inflation, 37 states are seeing nominal price declines, with prices down more than 20 percent year-over-year in California and Nevada, and more than ...