Property prices nationwide have now lost around 30% of their value from the peak of the market in 2006, the figures from the S&P/Case Shiller index show. In the year to January they plunged a record 19%.
The report also shows that there are considerable regional variations in prices with Florida and Nevada seeing the steepest declines.
Consumer confidence also plunged, reaching just above record lows in March. A depressed housing sector, coupled with dire employment prospects, kept consumer sentiment close to rock bottom.
Job conditions are terrible. There is a general sense of uncertainty because people are peppered with bad news around the world,' said Brian Bethune, economist at IHS Global Insight.
According to the figures only 2% of Americans said they intended to buy a home in the next six months, the weakest reading since 1982. 'The mood is still quite gloomy, people are reticent about spending,' said David Resler, chief economist at Nomura Securities.
Canada is also suffering and it on track to post one of its worst ever economic quarters, likely pushing the central bank to go beyond interest rate cuts in its efforts to combat the recession.
The federal government has been wrestling with the dilemma of making home mortgages readily available to stimulate the economy while at the same time preventing a glut of housing foreclosures because payments cannot be maintained. The result has been a rash of changes in mortgage restrictions and some new incentives
However concern about widescale defaults is growing. Canada's big banks and its federal mortgage insurer are moving to head off a rise in defaults by property owners.
A nationwide campaign has been launched to urge cash strapped property owners to approach their banks for mortgage relief aimed at preventing borrowers from falling behind on payments.
