The trend of home prices declines continues but is moderating indicating that the housing market may be starting to turnaround, according to data released Tuesday.

The Standard & Poor’s/Case-Shiller Home Price index of 20 major cities fell by 18.1 percent in April from a year earlier. It marked the third straight month the decline was not a record. The index has fallen every month since July 2006.

The 20-city slice of the S&P/Case-Shiller index registered a drop of 0.6 percent from March to April, compared with a 2.2 percent drop in the prior month.

"The pace of decline in residential real estate slowed in April," says David Blitzer, Chairman of the Index Committee at Standard & Poor's. "Thirteen of the 20 metro areas also saw improvement in their annual return compared to that of March."

“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 S&P index committee.

Eight of the 20 metros recorded price gains from March, with Dallas posting the largest increase at 1.7 percent, the index showed. Every city except Charlotte, N.C. reported some kind of improvement in their monthly return compared with March.

The 20-city index is off almost 33 percent from its peak in the second quarter of 2006, which means home values are now around 2003-levels.

Hardest hit remain Phoenix, AZ and Las Vegas, NV where home prices have lost more than half their value since their peaks.

Phoenix homes have lost 35.3% of their value over the year, was the worst performing market over that period followed by Las Vegas at 32.2 percent and San Francisco at 28 percent.

Denver prices fell the least over the same period with 4.9 percent drop, followed by Dallas and Boston with 5 percent and 7.7 percent decline respectively.

The S&P/Case-Shiller index monitors repeat sales on a specific group of homes in each city where sales between related parties, such as family members, are excluded.

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.42 percent with an average 0.7 point for the week ending June 25, 2009, up from last week when it averaged 5.38 percent. Last year at this time, the 30-year FRM averaged 6.45 percent.

The 15-year FRM this week averaged 4.87 percent with an average 0.7 point, down from last week when it averaged 4.89 percent. A year ago at this time, the 15-year FRM averaged 6.04 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.99 percent this week, with an average 0.7 point, up from last week when it averaged 4.97 percent. A year ago, the 5-year ARM averaged 5.99 percent.

One-year Treasury-indexed ARMs averaged 4.93 percent this week with an average 0.7 point, down from last week when it averaged 4.95 percent. At this time last year, the 1-year ARM averaged 5.27 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Mixed economic reports on the state of the housing market helped hold mortgage rates fairly flat this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Existing home sales rose for the second consecutive month in May by 2.4 percent, slightly less than the market consensus forecast; however the median sales price was 16.8 percent below that of the same time last year, according to the National Association of Realtors® (NAR). In contrast, new home sales fell 0.6 percent and the median sales price was only 3.4 percent lower than May 2008.

"On a more positive note, the inventory of unsold homes has lessened from a year ago, which may help cushion further house price declines. The number of existing homes for sale was 15.3 percent below that of May 2008, and new homes for sale fell by 35.9 percent. In addition, distressed properties accounted for only about one-third of existing home sales in May, down from over a half in March, according to the NAR.”

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Source: FreddieMac, Primary Mortgage Market Survey® (PMMS®), www.freddiemac.com

New US home sales unexpectedly fell in May and were down almost a 33 percent down from last-year's levels, a government report said Wednesday.

The Commerce Department said Wednesday that new home sales dropped 0.6 percent in May to a seasonally adjusted annual rate of 342,000. That was from a downwardly revised April rate of 344,000. Sales were down nearly 33 percent from May last year.

The drop demonstrates that the housing market’s recovery is likely to be longer. Inventory of new homes for sale at the end of May was 292,000 down more than 2 percent from April. At this slow-moving rate of sales that is a 10-month supply.

This is a big difference from existing homes sales. On Tuesday, the National Association of Realtors reported that sales of those properties rose 2.4% in May, as prices fell nearly 17% from a year ago.

The median and average price increases indicates that single-family home sales may have already hit bottom.

The median sales price of new homes rose to $221,600 in May, up 4.2 percent from a revised $212,600 in April and but down 3.4 percent from the median price of $229,300 in May 2008.

The average sales price in May was $274,300, up more than 5 percent from a revised $260,800 in April.

Existing home sales rose in May, as home prices became more affordable and tax credits attracted homebuyers.

The National Association of Realtors reported that existing home sales inched up 2.4 percent in May to a seasonally adjusted annual rate of 4.77 million units up from downwardly-revised rate of 4.66 million in the previous month. This is the third monthly increase this year.

The median price of homes sold in May was $173,000, 16.8 percent lower same month last year’s figure.

According to Lawrence Yun, NAR’s chief economist, the sales increase "is less than expected because poor appraisals are stalling transactions," Yun added. "Some contracts are falling through from faulty valuations that keep buyers from getting a loan."

With home sellers still competing against a rising number of bargain-priced foreclosures, and new rules for property appraisers are delaying or scuttling many deals. Nonetheless, low mortgage rates and affordable home prices helped draw in hesitant buyers and the $8,000 tax credit, which the Obama administration made available for qualified first-time home buyers, can boost sales.

The sales increase helped reduced the inventory of homes for sales. Total supply of previously owned homes fell 3.5 percent to 3.8 million existing homes for sale. That is 9.6-month supply at the current sales pace down from a 10.1-month supply in April. The normal market would have only about 6 months supply.

The inventory figures, however, don't reflect the large number of houses being held off the market by owners who are reluctant to sell while prices are falling.

Interest rates, for example, have climbed back from their all-time lows this spring. The average rate on a 30-year, fixed-rate mortgage was 5.38 percent last week, according to Freddie Mac.

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.38 percent with an average 0.7 point for the week ending June 18, 2009, down from last week when it averaged 5.59 percent. Last year at this time, the 30-year FRM averaged 6.42 percent.

The 15-year FRM this week averaged 4.89 percent with an average 0.7 point, down from last week when it averaged 5.06 percent. A year ago at this time, the 15-year FRM averaged 6.02 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.97 percent this week, with an average 0.6 point, down from last week when it averaged 5.17 percent. A year ago, the 5-year ARM averaged 5.89 percent.

One-year Treasury-indexed ARMs averaged 4.95 percent this week with an average 0.6 point, down from last week when it averaged 5.04 percent. At this time last year, the 1-year ARM averaged 5.19 percent.

(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)

“Reports of benign inflation figures reversed the upward trend of mortgage rates this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The producer price index rose only 0.2 percent in May, roughly a third less than the consensus forecast and the consumer price index increased by just 0.1 percent. Moreover, the 12-month drop of 5.0 percent in producer prices was the largest since 1949 and the 1.3 percent yearly decrease in consumer prices the biggest since 1950.

“It’s still too early to tell whether the decline in housing market activity has hit bottom yet. The prior three-week run up in rates for 30-year fixed mortgages, which amounted to over 0.75 percentage points, is starting to slow homebuyer demand, at least temporarily. Mortgage applications for home purchases fell for the first time in four weeks, slipping 3.5 percent for the week ending June 12th, according to the Mortgage Bankers Association. In addition, although new construction of one-family homes rose for the third consecutive month in May by 7.5 percent, and the National Association of Home Builders reported that homebuilder assessments of market conditions in June and for the remainder of this year had weakened."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

Source: FreddieMac, Primary Mortgage Market Survey, www.freddiemac.com