Instant view: Pace of decline in U.S. home prices moderates

NEW YORK (Reuters) - Prices of U.S. single-family homes declined in April from the prior month, but the pace moderated, suggesting stability is emerging in some regions,

Standard & Poor's/Case Shiller home price indexes reported on Tuesday.

KEY POINTS: The index of 20 metropolitan areas dipped 0.6 percent in April from March, after a 2.2 percent decline the month before, for an 18.1 percent downturn from a year earlier.

S&P said its index of 10 metropolitan areas declined 0.7 percent in April for an 18 percent year-over-year drop, after falling 2.1 percent month on month in March. The rate of annual decline in these measures has improved, from 18.7 percent for both indexes in March. * "While one month's data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions," David M. Blitzer, chairman of the index committee at S&P, said in a statement. "We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here."

COMMENTS:

BILL SCHULTZ, CHIEF INVESTMENT OFFICER, MCQUEEN, BALL &

ASSOCIATES, BETHLEHEM, PENNSYLVANIA:

"That seems to be the story these days. Whatever the expectation, clearly there's weakness around on the home price side but people had expected worse and when you get numbers not as bad, whether employment data or in this case housing, better than the worst-case scenario seems to be taken positively by the markets. It's providing a floor for stock prices here.

"The real key becomes, is this a reversal of the trend or are we just buying time here as the pace of decline slows? To get the markets moving to the next level you're going to have to see prices stop falling and begin to rise here at some point in the not-too-distant future. Having less-negative numbers is certainly good and helps the market but we're going to have to see a reversal of this trend before you get any sustained movement in the price of stocks."

JOHN SILVIA, CHIEF ECONOMIST, WACHOVIA SECURITIES, CHARLOTTE,

NORTH CAROLINA:

"It's still negative but the negatives are getting smaller... Another key thing is that you have a number of cities like Dallas, Denver and Charlotte which are up. You suspect that there's some turnaround in some these month-over-month changes despite the foreclosures and reports of people having trouble getting mortgages.

"Things are bottoming. For 10 to 15 of these cities, things will be positive in another month or two.

"This is positive news for people who don't live in those speculative markets. This is consistent with existing home sales. Housing is going to be less of a drag on the economy but it won't adding to it as it traditionally does."

KEVIN FLANAGAN, FIXED INCOME STRATEGIST, GLOBAL WEALTH

MANAGEMENT, MORGAN STANLEY, PURCHASE, NEW YORK:

"I don't think (the S&P/Case-Shiller data) provided anything new to the equation. One thing we continue to see; despite all the talk of green shoots there are many headwinds left. We are not seeing any rebound or resurgence brewing in the housing market. In housing, the worst is behind us, but it is an awfully deep hole we will have to climb our way out of."

DAN GREENHAUS, ANALYST, MILLER TABAK & C0, NEW YORK

"It's a little better than expected, but not much. On a top to bottom basis home prices are down 30 plus percent, which underscores the amount that home prices have to climb to get to normal territory.

"While they're better than expected in the short term, in the larger sense the housing market remains under great pressure."

MARKET REACTION: STOCKS: U.S. stock indexes were flat. BONDS: U.S. Treasury debt prices added to losses. DOLLAR: U.S. dollar was up against the euro and the yen.