Home prices are still falling, but not quite as steeply

U.S. home prices continued to fall sharply in April but are no longer doing so at a record-breaking pace, according to a widely followed index released Tuesday.

Home prices in 20 metropolitan areas were down 18% in April compared with the same month last year, according to the S&P;/Case-Shiller home price index.

In the Los Angeles area, which includes Orange County, April home prices fell 21% from a year earlier.

Los Angeles and Orange county prices in April were down 42% from their 2006 peak, the index shows. The 20-city index was down 33% from its 2006 peak.

The Case-Shiller index had posted record year-over-year declines from October 2007 to January of this year. April’s index represented the third straight month in which the pace of price declines slowed slightly.

“The stock market bottomed in March and measures of consumer confidence have turned upward. This report shows that these better spirits are also appearing in the housing market,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s.

Blitzer cautioned, however, that “it will take some time to determine if a recovery is really here.”

Foreclosures continue to drag down home prices, and high unemployment is adding to the housing market’s distress.

Still, the magnitude of year-to-year price declines has moderated. In January, Los Angeles-area prices had fallen 25% from the previous year; the 20-city index was down 19%.

Charlotte, N.C.; Chicago; Cleveland; New York; Portland, Ore.; and Seattle posted record year-over-year declines in April.

The steepest year-over-year declines in April were in Phoenix (35%), Las Vegas (32%) and San Francisco (28%).

Los Angeles-area price declines have varied substantially by price segments. The lowest-priced third of homes sold in April was down 54% in price from its peak, according to Case-Shiller; the middle third was down 42%; and the most-expensive third of homes sold was down 31%.

The lowest-priced homes in the Los Angeles area had more room to fall -- they had also shown the largest price increases during the real estate bubble, with prices in that segment inflated by subprime lending.

The Case-Shiller index compares the latest sales of detached houses with previous sales and accounts for factors such as remodeling that might affect a house’s sale price over time.

From those data, an index score is created to show price changes. An index score of 100 reflects January 2000 prices. The 20-city index in April was 139.18; the Los Angeles-area index for April was 159.37.

Prime mortgages 60 days or more past due climbed to 2.9% of such loans through March 31 from 1.1% at the same point in 2008, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a report Tuesday.

First-time foreclosure filings on the loans rose 22% from the fourth quarter, the report said.

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