The Conference Board Consumer Confidence Index, which made considerable gains in April, surged again in May to its highest level in eight months, as employment concerns ease.

The index now stands at 54.9, up from 40.8 in April and significantly higher than February's reading of 25.0.

"Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first," says Lynn Franco, Director of the Board's research center.

The recently troubled job market appeared more favorable to consumers in May, with 44.7% claiming jobs are "hard to get," down from 46.6% in April.

The percentage of consumers expecting more jobs in the months ahead jumped from 14.2% to 20%, while those anticipating fewer jobs decreased to 25.2% from 32.5%. And the proportion of consumers anticipating an increase in their incomes climbed to 10.2%.

Consumers' appraisal of overall current conditions made significant headway, according to the Board. Those claiming current business conditions are "good" increased to 8.7% from 7.9%.

Although, those saying business conditions are bad also increased, from 44.9% to 45.3%.

But looking ahead, consumers are considerably less pessimistic than they were earlier this year, Franco explains. "Expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us."

Consumers' short-term outlook revealed increasing expectations that business conditions will improve over the next six months. Those anticipating conditions will worsen declined significantly to just 17.8% from 24.4% in April.

Write to Kelly Curran.

As home prices continue to fall across much of the nation, those states that experienced the highest rates of home depreciation over the past three years are finally experiencing a slow down in devaluation, according to data released today by First American CoreLogic.

Nevada and California remain the top ranked states for annual prices dropsin March, down 25.9% and 24.9%, respectively; however, California's decline is the smallest since March 2008 and Nevada's drop is the smallest in six months.

Rhode Island sits in third place, with a 21.2% depreciation rate, and is currently the only state among the top five — also including Florida and Arizona –  that continues to experience a consistent acceleration in price declines.

But as the typically hard-hit states are graced with some relief, price declines are now accelerating in what were once stable markets. 33 states are now showing an acceleration in price declines and 14 are experiencing double digit declines – twice as many as a year ago.

"The problems are no longer confined to a handful of Sand States," says Mark Fleming, chief economist for First American CoreLogic in reference to Arizona, California, Florida and Nevada.

"Homeowners in many parts of the country are coming under stress from a loss in equity, rising delinquencies and foreclosures, and economic uncertainty,” he adds.

Fleming explains this distress is particularly pronounced in more expensive neighborhoods where the median value of all properties is over $1m.

"In these neighborhoods mortgage delinquency performance is worsening at a faster pace than the overall national delinquency rate, although the rate of delinquencies in these high-end neighborhoods is still much lower than the U.S. overall,” Fleming says.

Write to Kelly Curran.

Following a trend that began in late 2007 and prevailed throughout 2008, US home prices continued to fall at a record pace over the first quarter of this year, dampening hopes the housing slump is nearing an end.

The S&P/Case-Shiller US National Home Price Index recorded a 19.1% decline in Q109 compared to Q108, marking the largest decline in the series' 21-year history.

"We see no evidence that a recovery in home prices has begun," said David Blitzer, chairman of the index committee for Standard & Poor's.

On a month-over-month basis, prices in 20 major metropolitan areas fell an average 2.2% in March and were down 18.7% in the past year. Seventeen of those areas experienced a monthly decline, with Minneapolis, Detroit and New York posting record declines.

The three worst performing metropolitan areas in March were once again, located in the Sunbelt, each reporting negative year-over-year returns in excess of 30%. Phoenix was down 36%, while Las Vegas dropped 31.2% and San Francisco fell 30.1%.

Just as in February, Dallas, Denver and Boston fared comparatively best, down a lesser 5.5%, 5.6% and 8.0%, respectively.

As of March 2009, average home prices across the US sat at levels similar to those seen in Q402. And from the peak in Q206, average home prices were down 32.2%.

"On a positive note, nine of the studied metros are reporting a relative improvement in year-over-year returns and nine of the 20 metro areas saw an improvement in their monthly returns compared to February," says Blitzer. "Furthermore, this is the second month since October 2007 where the 10- and 20-City Composites did not post a record annual decline."

That's not to mention the recent jump in housing starts and home sales, which, alone, signal signs of stabilization. Albeit, analysts remain skeptical of pronouncing a bottom in the market.

"We can cheer all the data under the sun but until prices stabilize, I imagine that no sustainable gain in the pace of sales will be seen," wrote Dan Greenhaus, equity strategist for Miller Tabak & Co., according to Market Watch. And while inventories remain high, "downward pressure on home prices should continue for the foreseeable future."

Write to Kelly Curran.

The US Department of Housing and Urban Development (HUD) on Thursday cut off 102 Federal Housing Administration (FHA)-approved lenders from participation in the government program, which insures lenders against default-related losses on qualifying mortgages.

The termination of these lenders' direct endorsements came as part of HUD's actions taken against 120 lenders for violating FHA requirements.

"At this time of uncertainty in the mortgage market, FHA needs to be especially vigilant in making sure that its approved lenders meet the highest standards of conduct," said HUD secretary Shaun Donovan in a media report. "We expect, and more importantly American homebuyers deserve, that when they deal with an FHA-approved lender, they're dealing with a lender they can trust."

The announcement came ahead of the scheduled public release of a report studying the Mortgagee Review Board, the policing arm of HUD responsible for cracking down FHA-insured lenders that violate FHA regulations.

The Office of Inspector General (OIG) for HUD finds in its report that the board has historically failed to keep pace with the increase in the volume of FHA-insured loans, according to a report filed at the Washington Post.

Staffing issues and outdated technology systems lie at the heart of much of the board's drawbacks, although a mortgage fraud bill signed into law this week allows $490m to government and regulator departments, including HUD, to crack down on mortgage fraud. The extra funding should allow HUD more resources to pursue fraudulent lending and violations among FHA lenders.

The OIG's report concludes that the Mortgage Review Board "will remain marginal as an effective sanctioning body unless its enforcement actions include a much larger caseload," according to the WaPo article.

Write to Diana Golobay.