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"A striking improvement in the rate of decline"

Yale University economist Robert Shiller today on Bloomberg TV

As you can seen from the chart in this post, Mr. Shiller's comments on April numbers are a few months late.  The real striking improvement was back in February 2009, when home prices first began to fall at a lesser rate.

The Case Shiller index decreased 18.1% year-over-year in April, following an 18.7% drop in March.   A Survey of Economists predicted the index would drop 18.6%.  The peak decline was in January when the index declined 19% - the most on record. 

On the margin, things have gotten better for housing as the rate of decline in home prices is slowing.  While the price of a home is declining at a lesser rate, however, it does not make it easier for consumers to make mortgage payments.   As evidenced by the news on delinquency rates, we are not out of the woods yet.  It was reported today that delinquency rates on the least-risky mortgages more than doubled in 1Q09 from last year. 

That being said, the April Case Shiller numbers suggest we are at least continuing to head in the right direction.  Consumers should find some comfort in knowing that the value of one of their biggest assets, their home, is not declining at an increasing rate.  The real comfort and confidence will come, however, when these values begin to appreciate, and unfortunately, that may still be a long time off.

Howard W. Penney

Managing Director