After nine months of quarterly gains, US home prices dipped 3.9% from January to March as real-estate owned (REO) property takes more of the market, according to the Clear Capital Home Price Index. Home prices did grow 5.1% from last year, a sign that increases are flattening. In February, prices grew 5% on a yearly basis as well. All four US regions reported positive yearly gains for the first time since spring 2006. However, when Clear Capital analysts drilled down to the quarterly scale, they found renewed declines in regional prices. “Although yearly price changes remain positive compared to last winter's lows, the most recent declines reflect the fragile and volatile state of many housing markets and could signal a trend to renewed lows off last year’s levels for several markets,” said Alex Villacorta, senior statistician at Clear Capital. REO levels continued to rise, climbing to 28.9% of the market, compared to 26.1% in February. “The 2.8 percent national increase in REO saturation is also a concern, yet the prevalence of REOs is having a mixed effect on price trends at local levels,” Villacorta said. He added almost all of the major markets in California showed quarterly growth, when some in the Midwest – such as some areas of Ohio – are reaching double-digit declines. In both states however, more than one-in-three homes are being sold as REO. “This example highlights the disparity among markets, expecially with regard to how they respond to increased REO inventory – some areas will double dip, some will rebound,” Villacorta said. Write to Jon Prior.