Two indexes tracking home prices in major markets continue to show double-digit annual price declines, but the pace of those declines slowed for the fourth consecutive month during May, Standard & Poor’s said.

A clear inflection point has emerged in the rate of annual price declines measured by the S&P-Case-Shiller 10- and 20-City composite price indexes, Standard & Poor’s said.

After 16 consecutive months of record annual declines that began in October 2007, year-over-year price declines appear to have peaked in January 2009.

The 20-City Composite index, for example, showed prices down by 17.1 percent in May compared to a year ago. The annual decline in April was 18.1 percent, and now appears to have peaked at 19 percent in January. Looking at individual markets, all but three metro areas in the 20-City Composite saw smaller year-over-year price declines than in April.

Although month-to-month price changes are a less reliable measure than annual price changes, the 10-City and 20-City indexes showed prices increasing from April to May — the first month-over-month increase since the summer of 2006. In the broader index, 13 of 20 markets showed positive returns from April to May.

Dallas and Denver have reported three consecutive months of positive returns, while Atlanta, Boston, Cleveland, San Francisco and Washington, D.C., have had two consecutive months of positive returns.

"To put it in perspective, this is the first time we have seen broad increases in home prices in 34 months," said David Blitzer, chairman of the committee that oversees the index for Standard & Poor’s, in a statement. "This could be an indication that home price declines are finally stabilizing."

But Blitzer said the 17.1 percent annual decline in the 20-City Composite index is an indication that "we likely do have a way to go before we see sustained home price appreciation."

Annual price trends "remain relatively somber" with double-digit declines in 16 of 20 markets tracked, Standard & Poor’s said.

The 20-City Composite is down 32.3 percent from its peak in the second quarter of 2006, and home prices across the U.S. are back to mid-2003 levels.

The index shows prices down 54.5 percent from their peak in Phoenix and 53.4 percent in Las Vegas. Other markets hitting new lows in May were Los Angeles, Miami, Seattle and Tampa, Standard & Poor’s said.

***

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