NEW YORK (CNNMoney.com) -- Home prices continued to plunge in November, according to a new government report released Thursday.

The Federal Housing Finance Agency (FHFA) reported that home prices fell a record 1.8% for the month, compared with October, declining at an annualized rate of nearly 20%. That follows losses of 1.2% and 1.1% in the two previous months. For the 12 months ended November 30, prices fell 8.7%, which was the largest 12-month price drop ever for the 17-year-old index.

"We've been seeing an acceleration in the rate of housing-market decline," said Mike Moran, a real estate analyst with Daiwa Securities.

Normally, declines on the FHFA index (formerly known as the Office of Federal Housing Enterprise Oversight Index), have been much more modest than other price gauges, like the .

That's because the FHFA index tracks the purchase price of homes bought with so-called conforming mortgages - generally loans of $417,000 or less - which are sold to or guaranteed by mortgage giants Fannie Mae (, ) and Freddie Mac (, ). The Case-Shiller index, however, covers all purchases in a given area, including more expensive homes that were more prone to huge runups during the bubble, and have since seen steep declines.

Additionally, the FHFA index also has broader geographic reach, extending into rural counties that tend to have more stable prices than the urban areas that Case-Shiller surveys.

Considering all these factors, the fact that the November FHFA index posted such a large drop is especially troubling, although perhaps not surprising.

"The news in the housing markets has just been dreadful," said Moran.

That bad news includes that are still on the rise, and reports of .

According to FHFA, the Great Plains and prairie states of North and South Dakota, Nebraska, Kansas, Iowa, Missouri and Minnesota were the worst-hit U.S. regions in November. Prices there dropped a whopping 2.7%. New England, where prices inched down 0.7%, had the narrowest losses.

"A lot of the declines we're observing are due to the rising number of post-foreclosure sales," said FHFA senior economist Andrew Leventis. "Obviously, there's a lot of pessimism out there right now," he said. "The pessimists may be driving the car now."

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