Rhode Island’s housing market continues its downward spiral, with second-quarter house prices falling to their lowest level in five years, according to two separate reports out today.

Sales of single-family houses during April, May and June slowed to a crawl, a national index of house prices worsened, and economic forecasters now say that conditions in Rhode Island and much of the country are expected to deteriorate through next year.

The Rhode Island Association of Realtors reported that single-family houses sold through real estate agents during April, May and June declined 17 percent from the same three months last year, and the median price fell 10.7 percent, to $250,000 — the lowest since mid-2003.

The Warren Group separately reported that single-family house sales during the first half of this year declined 19.2 percent, and the median price fell 10.8 percent, to $240,000. (The Warren Group data, unlike the Realtors, include sales by owners as well as real estate agents.)

Moody’s Economy.com forecasts that the median house prices in Rhode Island will fall another 10 percent — to $225,000 — before the market hits bottom. (The U.S. forecast is for prices to hit bottom by the third or fourth-quarter of next year.)

By then, Rhode Island house prices will have fallen 20 percent from the market’s peak in early 2006.

During the last major decline in housing prices in the early 1990s, prices fell about 10 percent before recovering.

“At least since 1975 we haven’t had anything like this for Rhode Island, and I suspect not for the U.S. as a whole either,” said Andres Carbacho-Burgos, economist at Moody’s Economy.com in West Chester, Pa.

A major drag on the market is Rhode Island’s swelling supply of unsold houses. At the current pace of sales, it would take 13 months to sell all the single-family houses on the market during April, May and June— up from 11 months a year earlier, according to an analysis of data from the State-Wide Multiple Listing Service. The market is generally considered balanced between sellers and buyers when the supply is about six months.

One “positive sign,” the Realtors reported, was a decline —from 6,772 to 6,679 — in the inventory of single-family houses on the market during the month of June compared with a year earlier. The 1.4 percent dip followed another decline in May, the report said.

“The trends seem to be going in the right direction,” Rhode Island Realtors’ president, Rob Scaralia, said in a statement. “We’re hopeful that since Rhode Island was among the first markets to enter the boom, we’ll be among the first to come out of the decline.”

Not everyone, however, is convinced. Another way to explain a decline in inventory as the pace of sales slows is discouraged sellers.

“People are taking their homes off the market,” said Suzanne E. Mulvee, senior real estate economist at Property & Portfolio Research in Boston. “It just goes to show you the sentiment in the market: Why bother having open houses if the thing is not going to move?”

Sellers typically take their houses off the market during slowdowns, Mulvee said, only to put them back on the market later as “new” listings to attract more buyers.

An index of house prices in 20 U.S. metropolitan areas dropped 15.8 percent from a year earlier, the steepest decline since the Case-Shiller Home Price Index began recording in 2001. A notable exception was Boston, which ranked among the top five performers. Providence is not included in the index

The Case-Shiller Index, among the most widely watched house price indexes, measures repeat sales so it is not skewed by changes in the mix of properties sold.

Despite Boston’s top performance, the overall market in Massachusetts continued to deteriorate, with single-family house sales during the first half of the year plunging to the lowest level in more than 15 years, The Warren Group reported yesterday. From January through June, sales declined 19.1 percent from a year earlier, and prices dropped 9 percent, the report said.

The Massachusetts Association of Realtors reported single-family house sales fell 13.7 percent during April, May and June, and the median price fell 8.5 percent, to $325,000.

Foreclosures continue to drive up house listings and drag down prices. About one in five single-family houses sold in Rhode Island during the second quarter — 379 houses — were bank-owned, according to the Realtors report. Foreclosed properties sold by banks or “distressed” sales by owners to avoid foreclosure are typically priced at well below market value.

Mulvee, the economist, said that the country needs to “grow new homeowners” to buy up all the properties on the market, and that takes time.

“It takes people graduating from school, people renting now and continuing to save so they can buy,” Mulvee said, “We borrowed from the future [when] we took really good renters and made them really bad homeowners.” 2008 SECOND-QUARTER R.I. SINGLE FAMILY HOME SALES

3-MONTH SALES LISTED WITH MEDIAN PRICES AND DAYS ON THE MARKET

Information is provided by State-Wide Multiple Listing Service Inc. Readers are cautioned that the median sales price — with half the prices higher and half lower — generally reflects the quality and the mix -type and size of the properties being sold at the time and is not a true measure of home values. Information deemed reliable but is not guaranteed.

THE PROVIDENCE JOURNAL / PAT POTHIER

larditi@projo.com