Silver Lining for Housing Index?

Earlier today, one of the key housing indices, the Standard & Poor's Case-Shiller Index, continued to exhibit a negative trend. However, it might be in the process of stabilizing, which could lead to a trough of the current issues by 4Q09-1Q10.

For April, home prices for 20 major cities declined 18.1% year-over-year, with an 18.0% decline for the 10-city index. However, since 2Q06, the 20-city index moderated by nearly 33.0% with the 10-city index off nearly 34.0%, or approximately the same levels experienced in 2003.

We would point out that April 2009 was the third consecutive month that both indices did not continue to accelerate at a record setting pace. Moreover, the yearly losses in 13 metros improved on a month-over-month basis.

While some could view this as the continuation of "Green Shoots," financial institutions, such as but not limited to Citigroup (C - Analyst Report), Bank of America (BAC - Analyst Report), US Bancorp (USB - Analyst Report), Wells Fargo (WFC - Analyst Report) and JPMorgan (JPM - Analyst Report), are expected to experience additional financial statement pressures over the next several quarters as mortgage portfolios and the related securities continue to reel from foreclosure pressures in the pipeline.

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