Home prices have slid more than during the Great Depression

Home prices dropped in March for the eighth consecutive month, and prices have now slid further than they did during the Great Depression, according to a report by S&P/Case-Shiller.

The average American home now costs 33 percent less than it did at the peak of the housing bubble in 2006. The fall during the Great Depression bottomed out at 31 percent, and it took 19 years for prices to recover, according to an analysis by Capital Economics.

Prices fell 0.8 percent in March, and are now below their previous low from the first quarter of 2009, according to the report.

The report, which was released Tuesday, is a composite index which analyzes 20 metropolitan areas. The index for March was 138.16, tumbling below 2009's low of 139.26.

Prices fell by an average of 5.1 percent over the last year. Washington, D.C. was the only metropolitan area to experience an increase over the last year, at an average of 4.3 percent.

Home prices are back to their mid-2002 levels, according to the report. But the slide isn't necessarily a reason to panic, says Greg Daugherty, executive editor of Consumer Reports.

"For most homeowners with manageable mortgage payments and no immediate plans to sell, falling home prices are no reason to panic," says Daugherty. "But they do remind us that our homes are first and foremost places for our families to live, not investments that will always rise in value."

Consumer Reports recommends that consumers looking to buy also consider other costs associated with home prices. Find out what the owner pays for taxes, heating, cooling, and utilities before making an offer. Also, call your homeowners-insurance company to find out the cost of insuring the home.

For sellers, pricing is crucial. Homes sell best when they are priced just below the level of other homes in the area.

Furthermore, for retirees, Consumer Reports says you should weigh the pros and cons of buying a house versus renting one instead.

—Evan MacDonald