More worries over the credit crunch arrived today as 17 out of 20 US cities reported record annual declines in house prices, a survey release today showed.

Standard & Poor's/Case Shiller Index, which tracks 20 of the largest housing markets, said prices fell 2.6% to 175.94 in February from January, an annual drop of 12.7%. This is the largest fall since S&P started to track home prices in 2000.

S&P's index of 10 cities fell 2.8% in February to 190.58, a record annual decline of 13.6%. This is the biggest drop since 1987.

"There is no sign of a bottom in the numbers," David Blitzer, chairman of the index committee at S&P. "Prices of single family homes continue to drop across the nation."

Rob Carnell, an economist at ING, said: "There is no sign of US house prices bottoming, and there is no way that such a trough can be extrapolated from continually worsening data.

"The underlying driver of much of the turmoil in financial markets is hurtling ever faster downwards ... As a final taster of just how bad this sector is right now, the 3-month annualised rate of decline in US house prices is nearly 25%."

Source: The Guardian