11 cities of the 20-city index saw year-over-year declines

“Further,” notes S&P’s David Blitzer, “in six cities, prices were at their lowest levels since the prices peaked three-four years ago. These data point to a risk that home prices could decline further before experiencing any sustained gains. While the year-over-year data continued to improve for 18 of the 20 MSAs and the two Composites, this simply confirms that the pace of decline is less severe than a year ago. It is too early to say that the housing market is recovering.”

This chart might be a better representation of what’s really happening… that year-over-year gain looks pretty silly plotted this way:

The real home price index report to watch won’t come out until July. That’s when Case-Shiller will update May (next month's) prices, the first month since the spring of 2008 that the U.S. housing market will not manipulated by the government homebuyer tax credit.

In all, 1.8 million buyers have taken advantage of these $8,000 free tax credits, at an expense of $12.6 billion to the US Treasury. Those numbers are just through February.

That program is supposed to expire this Friday. The National Association of Realtors (NAR) estimated last week that 44% of March homebuyers would NOT have purchased a home without the credit. That doesn’t bode well for the rest of 2010. Agora Financial