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Index’s back-to-back monthly drops rank among worst ever.

The monthly rate of home price decline is now rivaling that seen during the Great Recession – the question now facing housing analysts is how long it will continue to do so, and how far off peaks prices will drop.

July and August this year marked the largest single-month price declines seen since January 2009 and rank among the eight largest on record, according to a report Monday from Black Knight.

Its Home Price Index (HPI), median home prices fell 0.98% in August, just a slight tick better than July’s upwardly revised 1.05% monthly decline. It was the sharpest contractions seen in more than 13 years.

Bill McBride, author, the Calculated Risk blog, writes today, “All in, the average home price is down 2% ($8.8K) from its June peak nationally as we enter a five-month span from September through January in which home prices tend to face more neutral to negative seasonal pressure.”

A Stunning Reversal

It’s part of what has been a somewhat stunning reversal, led by rapidly rising mortgage rates, this comes after prices rose steadily May through July before for-sale inventory levels stalled in August, growing at just 1/10th the rate of recent months.

“Sellers [then] appeared to take a step back from the market,” Black Knight said in a release.

For the first time in 20 years, mortgage rates topped 7% temporarily last week before settling just below that level.

Lehman Bros., Revisited

Black Knight Data & Analytics President Ben Graboske said in prepared remarks, “The only months with materially higher single-month price declines than we’ve seen in July and August were in the winter of 2008, following the Lehman Brothers bankruptcy and subsequent financial crisis.”

This week, too, has featured plenty of social media “noise” and industry commentary about how Credit Suisse bank is in financial duress and what could be a “Lehman-type moment” for Europe.

Credit Suisse is supposed to outline a plan in the coming weeks about how it plans to address its cratering stock price and lack of confidence shown by investors and potential customers.

CNBC Anchor Calls UBS Home Survey ‘Outlandish’

In results that were astounding to CNBC’s anchor Tyler Mathisen during Monday’s PowerLunch segment, 44% of respondents to a UBS Housing Intentions Consumer Survey said they plan to be a residential property in the next 12 months and 42% of respondents said they plan to sell their current residence in the next 12 months.

John Lovallo, UBS senior research analyst, said the recently released, wide-ranging, unbiased survey is based on more than 2,000 respondents and is not skewed to higher income consumers.

The survey showed that 80 percent of respondents didn’t view affordability as a major problem; and 90 percent believed their homes would be worth more a year in six months.

Lovallo said he was surprised at the results, too. He said he believes that consumers have “a lot of levers that they can pull as first-time homebuyers, such as moving further from the city. If they can buy, they will buy.”

Mathisen called the data “outlandish” given the rising interest rate environment.