Falling home prices raise fears of new bottom

The housing slump isn't over.

Tax credits and historically low mortgage rates have failed to lift home prices this year. Prices fell 0.5 percent in March from February, according to the Standard & Poor's/Case-Shiller 20-city index released Tuesday.

The co-creator of the Case-Shiller index, who predicted in 2005 that the housing bubble would burst, is raising concerns that the worst may be ahead. That fear is shared by other economists who point to weak job growth, tight credit and many more foreclosures ahead.

"I'm worried still about the risk of a double dip," economist Robert Shiller said.

The month-to-month drop from February to March marked the sixth straight decline. Prices in 13 of the cities fell. Only six metro areas recorded price gains. One, Boston, came in flat. In New York prices were down 0.7 percent from the month before and 2.4 percent from the year before.

In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter. Prices remain nearly 31 percent below their July 2006 peak. But they are nearly 3 percent from their April 2009 bottom.

The numbers are especially disturbing because they show that improved sales due to the tax credits didn't translate into higher prices, said David M. Blitzer, chairman of the S&P index committee.

Newsday has reported earlier that on Long Island and in Queens, March's median closing price of $350,000 was a 1.9 percent decrease from a year ago and a 1.2 percent dip from February, according to the Multiple Listing Service of Long Island.

- From staff and wire services