WASHINGTON — A home-price index considered to be the most comprehensive reading of the U.S. market posted its sharpest decline in its 17-year history, and analysts say housing has yet to bottom out.

Rapidly falling home prices in California, Florida and Nevada skewed the national results.

The Office of Federal Housing Enterprise Oversight said yesterday that home prices in the first quarter fell 3.1 percent compared with last year.

It was only the second quarter of price declines since the index started in 1991. The index's first decline, on a year-over-year basis, was its drop of 0.45 percent in the final quarter of 2007.

On a quarter-to-quarter basis, the government index fell 1.7 percent from the fourth quarter of 2007 to the first quarter of 2008.

Another widely followed reading, the Standard & Poor's/Case-Shiller index, has shown larger declines for major U.S. metropolitan areas. But analysts say the government index is a more comprehensive reading of the nationwide housing market.

That's particularly true for Midwest states, where prices never skyrocketed and have been less affected by the real estate downturn.

"Most people don't live in a Miami condo," said Michael Englund, chief economist at Action Economics in Boulder, Colo.

Still, declines in the government index, which focuses on less-expensive properties and includes fewer houses bought with risky home loans that have gone sour over the past year, show the depth of the housing market's troubles.

Prices fell in 43 states, with the biggest declines in California and Nevada. Home prices dropped by more than 8 percent in those states.

The government index is calculated by tracking mortgage loans of $417,000 or less that are bought or backed by the government-sponsored mortgage-finance companies Fannie Mae and Freddie Mac.