Gary Shiller

Thanks to BusinessWeek.com for this article….

The latest Standard & Poor’s/Case-Shiller housing index numbers out today show the market falling less dramatically than it had been earlier in the year. The 10 and 20 city indices were both down 18% in April, versus the same month in 2008. But that decline was less severe than it had been in January, February and March.

“The pace of decline in residential real estate slowed in April,” says David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor’s. ”Every metro area, except for Charlotte, recorded an improvement in monthly returns over March. While one month’s data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in a few of the regions.”

The worst hit cities include Phoenix (down 35%), Las Vegas (-32%) and San Francisco (-28%). Best performers were Denver (only down 4.9%), Dallas (-5%) and Boston (-7.7%). Dallas has held up the best since its market peaked in June 2007, falling only 9.6%. Phoenix fared worst, off 54% from its June 2006 peak.

Cameron Findlay, the Chief Economist of mortgage site LendingTree.com, says the clearest sign of where the housing market is now, lies not in a national price index from two months ago but in the cost of mortgages today. Rates on a 30 year conventional mortgage have dipped down to 5.37% from a recent high of 5.74%. That’s telling us the housing market hasn’t recovered. The Fed is still committed to buying $300 billion of long-term Treasury bonds to inject more liquidity into the system, he notes.

“There was a wide anticipation that the Fed would ease off on, not purchase as much,” he notes. “Bonds started selling off, rates started rising.” That’s changed. Findlay expects rates to stay at this level at least until the Fed finishes its bond buying in September or until more convincing signs emerge that the housing market has come back.

“It’s still down,” Findlay says of the Case-Shiller index. “The only positive news is that Colorado slightly improved. There’s still extreme pressure due to (mortgage) delinquencies.”

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