MONTGOMERY, Alabama -- The city of Montgomery experienced the largest drop in home prices in cities with populations of $250,000 or more for the year ending March 31, according to a Kiplinger report on the MSN Real Estate website.

Home prices dropped by 14.5 percent over the last year, according to data from Clear Capital, a provider of real-estate data and analytics.

Prices are down 45.8 percent since its peak in 2006, and the median home price is $86,000.

The foreclosure rate is 1 in every 517 households, according to the report.

Montgomery's home prices only dropped 3.6 percent through the year ending in April, according to CoreLogic's home price index.

In the Capital of Dreams, the inventory of homes in March was 8.9 months, well above the four to six months' inventory that represents a balanced market between buyers and sellers, according to Kiplinger. The number of homes sold grew by 22.3 percent in the past year, but homes lingered on the market for an average of 115 days.

The slowly improving economy, especially the automotive-manufacturing industry, should bolster the demand for houses, according to the report.

U.S. benchmark statistics: One-year change in home prices: 6.8 percent; median home price: $177,500; change in price since 2006 peak: -33.8 percent.

List of cities with the largest drop in home prices:

1. Montgomery

2. South Bend, Ind.

3. Winston-Salem, N.C.

4. Trenton-Ewing, N.J.

5. Manchester-Nashua, N.H.

6. Green Bay, Wis.

7. Scranton/Wilkes-Barre, Pa.

8. Atlantic City, N.J.

9. St. Louis

10. Charlotte, N.C.

11. Greensboro/High Point, N.C.

12. Baton Rouge, La.