S&P/Case-Shiller HPI down 3.2% in Q1

Sorry about the delay in posting this:

Home prices fell in the first quarter of 2010 but are still higher than they were a year ago.

According to the S&P/Case-Shiller nation-wide index, home prices fell 3.2% quarter-over-quarter but have still managed to climb 2% year-over-year.

The index continued to show weakness despite very low mortgage interest rates and tax incentives to encourage home purchases. ...

"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 M. Blitzer, chairman of S&P's index committee.

Brad Hunter, who follows the housing market for Metrostudy, a consulting and data-providing company, is predicting further price erosion along the lines of 10% or so before the market fully bottoms out.

Government intervention paused the fall in housing prices over the past year, but now that the tax credits are gone I expect the free market to continue pushing prices lower.

Speaking of the tax credit:

New home sales soared in April as homebuyers rushed to claim the tax credit that expired at the end of the month.

New home sales climbed 14.8% to a seasonally adjusted rate of 504,000 last month, up from an upwardly revised 439,000 in March, the Census Bureau reported on Wednesday. Sales year-over-year were up 47.8%. ...

April was the second straight month of increases. In March new home sales snapped a four-month losing streak and surged at the fastest single-month rate in 47 years as homebuyers snatched up properties ahead of the looming deadline for the tax credit.

The homebuyer tax credit, which expired April 30, boosted sales since buyers had to sign contracts by the end of last month.

Now that the tax credit has expired, the temporary boost in home sales is likely over. After all, who wants to be the sucker who buys his house on May 1?