Home prices by all accounts continue to fall. However, Fiserv Inc. (FISV) is projecting home values will stabilize somewhat in the third quarter after dropping 3% in the first half of 2011 and about 4% in the fourth quarter, according to the firm's Case-Shiller Index home price report. The Fiserv report is the result of the financial technology firm's analysis of Federal Housing Finance Agency data and the firm's other indexes. The Fiserv report covers home price trends for more than 375 U.S. housing markets. On Monday, real estate data analytics firm Zillow also indicated that its home value index in the first quarter experienced the steepest decline in three years. The good news, according to Fiserv's report, is the possibility falling home prices combined with gains in the job market will finally put vacant homes and homebuyers on the same playing field. "The first step toward restoring confidence in housing markets is an improvement in consumer sentiment, which we expect will increase slowly through 2011 due to stronger job gains and a falling unemployment rate," said David Stiff, chief economist at Fiserv. The company estimates it will take at least until the end of 2012 to stabilize prices in the hardest-hit housing markets, but the data technology firm sees a clear upside to falling prices. "The slide in prices, however, has greatly improved home affordability: Relative to household income, affordability is at or close to pre-bubble levels in nearly every metro area across the U.S.," Fiserv said. "This dynamic, combined with growing economic strength, leads Fiserv and Moody’s Analytics to project that average U.S. home prices will stabilize in the third quarter of this year." Write to: Kerri Panchuk.