"The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," says Paul Dales, senior economist at Capital Economics in Toronto, according to CNBC.
The figures come at a time when unemployment numbers hover stubbornly high around 9.1 percent, while economic growth figures remain sluggish to the point that Fed officials say expansive monetary policy will stay in place.
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"The only comfort is that the latest monthly data show that towards the end of the first quarter prices started to fall at a more modest rate," Dales says.
Still, he adds, expect a lost year.
"Nonetheless, prices are likely to fall by a further 3 percent this year, resulting in a 5 percent drop over the year as a whole."
Fed Chairman Ben Bernanke has said the jobs market is running through a "loss of momentum," and until hiring picks up and unemployment rates fall, the economy will continue to limp along.
"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," Bernanke said recently in Atlanta, Georgia, according to AFP newswire.
Housing figures big in recovery as well.
"The depressed state of housing in the United States is a big reason that the current recovery is less vigorous than we would like," Bernanke added.
Housing normally leads an economy out of recession in that the development of new homes creates construction and other jobs needed to spur building.
Manufacturing is the leading sector in the present recovery, although it requires less of a work force to operate.
"This economic cycle is different from anything we have seen in 20 or 30 years, because housing is not playing that leading role," says Christopher Low, chief economist with FTN Financial, according to the Los Angeles Times.
"Manufacturing is leading the economy now, and manufacturing is an industry where the last three decades the focus has been on productivity, doing more with fewer people."
That's also bad news for President Barack Obama and incumbent congressmen, who are facing dismal economic indicators as an election year approaches.
"Every president wants to run on a strong economy," says Robert Shapiro, an economic adviser to President Bill Clinton, the Times adds.
"This president will have to run on the fact he's bringing the economy back from the reckless policies of the previous administration. That's the case they'll have to make."