Home prices hit another new low in the first quarter, down 5.1 percent from a year ago to levels not reached since 2002. It was the third straight quarterly drop for the S&P/Case-Shiller national home price index, which was released Tuesday. Prices are now down 32.7 percent from their record set five years ago.

The housing market went through a short recovery period starting in mid-2009, recovering nearly 5 percent of earlier losses. After homebuyer tax credits expired last April, the slump resumed.

A separate S&P/Case-Shiller index covering 20 major cities also dropped during March, the index’s eighth straight monthly drop. 10 dirt-cheap housing markets

Of the 20 cities, only Washington has posted a home-price gain: 4.3 percent over the past 12 months.

Minneapolis homes lost the most value over that period, with prices falling 10 percent.

Other big losers include Phoenix (- 8.4 percent), Chicago (- 7.6 percent) and Portland, Ore. (- 7.6 percent)

Prices continue to be hammered by foreclosures with high numbers of repossessed homes flooding the market.

Many repossessed homes are in poor condition and sell at a big discount to conventionally sold homes, driving down overall values.

Falling home prices have a devastating impact on new home construction, according to Pat Newport, a housing market analyst for IHS Global Insight.

Normally, new-home construction is an important contributor to the economic recovery. Not so this time, according to Mike Larson, an analyst with Weiss Research.

If residential development had come back as it has in the past, the current recovery would be much stronger. There’s be much more robust hiring of construction workers, building materials manufacturers and drivers and deliverymen to bring the products to site.

Newport pointed out that when developers build a new home for $300,000 it adds $300,000 to the economy, as measured by GDP. An existing-home sale just adds 5 percent or 6 percent in broker’s commission.