Home prices fell in December for a fourth straight month in most major U.S. cities, as modest sales gains in the depressed housing market have yet to lift prices.
The Standard & Poor's/Case-Shiller home-price index shows prices dropped in December from November in 18 of the 20 cities tracked. The steepest declines were in Atlanta, Chicago and Detroit. Miami and Phoenix were the only cities to show an increase.
The declines partly reflect the typical slowdown that comes in the fall and winter.
Still, prices fell in 19 of the 20 cities in December compared to the same month in 2010. Only Detroit posted a year-over-year increase. Prices in Atlanta, Las Vegas, Seattle and Tampa dropped to their lowest points since the housing crisis began.
Nationwide, prices have fallen 34 percent since the housing bust, and are now back to 2002 levels. A gauge of quarterly national prices, which covers 70 percent of U.S. homes, fell to its lowest point on records dating back to 1987 after being adjusted for inflation.
"The pick-up in the economy has simply not been strong enough to keep home prices stabilized," said David M. Blitzer, chairman of S&P's index committee. "If anything, it looks like we might have re-entered a period of decline as we begin 2012."
There's hope among some economists that an increase in sales could stop prices from falling further by the late winter or early spring.
Paul Dales, senior U.S. economist at Capital Economics, said there are "compelling reasons to believe that the end of the housing crash is finally in sight."
Home prices tend to follow sales by about six months. When sales rise, prices rise, too, and an increase in prices would likely create a positive cycle.
"Stability in home prices will likely persuade more potential buyers that it is now worth getting into the market," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
The Case-Shiller monthly index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The December data is the latest available.
Home values remain depressed despite some hopeful signs at the end of last year.
Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.
Homes are the most affordable they've been in decades. And mortgage rates have never been cheaper.
Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.
Conditions are improving for those in position to buy a home. Still, many people can't afford to buy or are unable to qualify for mortgage. Some people in position to buy are holding off, worried that prices could fall even further.
The biggest reason why prices are still falling is foreclosures, which are still high across the country. Foreclosures and short sales _ when a lender accepts less for a home than what is owed on a mortgage _ are selling at an average discount of 20 percent.