HousingWire reports the Federal Housing Finance Agency (FHFA) recorded the largest quarterly drop in house prices since the last quarter of 2008, as prices fell 2.5 percent in Q1 2011 from the previous quarter. Based on the mortgages of Fannie Mae and Freddie Mac, house prices fell 5.5 percent over the past year. March prices dropped 0.3 percent from February and are nearly 20 percent below the high point of April 2007. By state and region in the first quarter, house prices dropped in 43 states and in all the nine Census Bureau Regions as the number of distressed properties continues to weigh down the market. At seven percent, San Diego suffered the largest decrease in home prices.