National house prices fell 3.2% in Q110 from the previous quarter, but remain 2% above year-ago levels, according to the latest Standard & Poor’s (S&P)/Case-Shiller House Price Index (HPI). It marks a continuance of the trend began in April’s HPI, when national house prices made their first annual increase in three years. “Housing prices rebounded from crisis lows, but recently have seen renewed weakness as tax incentives are ending and foreclosures are climbing,” S&P/Case-Shiller authors said in a report today (download here). In March, the 10-city and 20-city composites recorded 3.1% and 2.3% growth over last year, pushing the national index higher than last year (illustrated above). In March, 13 of the 20 metropolitan statistical areas (MSAs) and both monthly composites declined although the composites and 10 MSAs showed yearly appreciation. Average house prices are now at similar levels last seen in spring 2003. “The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices,” says David Blitzer, chairman of the Index Committee at Standard & Poor’s. “In the past several months we have seen some relatively weak reports across many of the markets we cover.” The 10-city and 20-city composites are down for the sixth consecutive month. “While year-over-year results for the National Composite, 18 of the 20 MSAs and the two Composites improved, the most recent monthly data are not as encouraging,” Blitzer added. “It is especially disappointing that the improvement we saw in sales and starts in March did not find its way to home prices. Now that the tax incentive ended on April 30th, we don’t expect to see a boost in relative demand.” Write to Diana Golobay.

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