When is a near double-digit decline in home prices viewed as a small victory? When you're the United States in late 2008 -- a nation grappling with its worst housing slump in decades amid signs of a deepening recession.

U.S. median home prices fell 9% in Q3 compared to a year earlier, to $200,500, the National Association of Realtors announced Tuesday. Prices fell in 120 U.S. metro areas, rose in 28 and were flat in four.

California registers major declines

The largest decline in home prices occurred in California: the Riverside-San Bernadino area recorded a 39.4% decline, to $227,200; the Sacramento area, a 36.8% decline to $212.000; and the San Diego area, a 36% plunge to $377,300.

At the other end of the spectrum, prices rose 12.5% in Elmira, N.Y, and 8.7% in Decatur, Illinois.

Economist Peter Dawson said today's NAR statistics represents more, sobering data from the housing sector, but in the broader context the report is not as bad as the quarterly data implies.

"We're down 9%, but it's less than what most feared, so that's a positive development, sort of," Dawson said. "We've experienced so many jolting, double-digit price declines in home prices and other negative stats from the sector that anything less than the truly abysmal looks modest, and that's the case with the Q3 NAR data."

People buying a home for the first time are usually young. They are probably at the beginning of their careers, which means that they do not have much money. In a recession, they would seem to be poor credit risks. For these people, getting a home mortgage should be nearly impossible.

But, a recession does strange things and turns some assumptions on their heads. It turns out the the lower end of the real estate market is getting so cheap that buyers can pick and choose an incredibly large inventory which, in many cases, sellers have to dump at any price.

According to the AP, "First-time buyers are much more flexible in entering the market because they aren't concerned about selling an existing home," National Association of Realtors Chief Economist Lawrence Yun said in a statement. Good point. Most people can't sell their current homes. They won't be in the market for a new one at all. Because of that, dynamic first-time buyers represented 41% of all real estate transactions in 2007.

There is a bit of hidden good news in the NAR analysis. First-time home buyers have a "plentiful" supply of unusually inexpensive homes and an unprecedented opportunity to negotiate on price. As the "retail value" mid-priced and higher-priced homes continues to drop, buyers will come back into those markets as well. Some of the opportunities will just be too good to resist.

Douglas A. McIntyre is an editor at 247wallst.com.

Sales of existing homes in June fell 2.6%, to a seasonally-adjusted annualized rate of 4.99 million - - the lowest level in 10 years - - the National Association of Realtors announced Thursday.

Economists surveyed by Bloomberg News had expected June existing home sales to total a 4.94 million annualized rate. The annualized rate totaled 4.99 million units in May; a year ago, in June 2007, it was 5.75 million units.

Meanwhile, the national, median, existing home price for all housing types was $215,100 in June, down 6.1% from a year ago when the median was $229,000.

Existing home sales varied by region. Sales rose 1% in West, but fell 6.6% in the Northeast, 3.4% in Midwest, and 3.1% in the South.

'Bad time to be a home seller'

Economist Peter Dawson said the June existing home sales statistic shows that the housing market remains a buyer's market.

"No question, it's a bad time to be a home seller. Existing home prices continue to slide in most markets, and there's little in the data to suggest a turnaround, given the U.S. economy's doldrums," Dawson said. "My advise for those who are in the market to buy and don't have to buy a house right now - - wait it out, quarter by quarter. Prices in your market could drop considerably."

Pending sales of existing homes in April 2008 rose 6.3%, to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Monday. A pending sale is one in which a contract was signed on an existing home, but not yet closed.

Economists surveyed by Bloomberg News had expected April pending home sales to fall 0.4%. The NAR said its pending home sales index rose 6.3% to 88.2, its highest level in six months. The pending homes sales index fell in March and February.

However, even with Monday's surprising April statistic, pending home sales are still down 13% from April 2007.

Economist Peter Dawson said home buyers / sellers should not conclude that the U.S. housing market is in recovery "until both sales and median prices rise for several consecutive months" across the United States.

Pending home sales varied by region. Sales rose 13% in the Midwest, 8.3% in the West, and 4.6% in South; sales fell 1.9% in the Northeast.

Economic Analysis: A surprisingly positive April existing home sales report. Still, as economist Dawson outlined, economists underscore that one shouldn't read too much into one monthly statistic, given it's a short snapshot of housing conditions, and due to likely revisions. One should also evaluate the April number in the context of the long and wide U.S. housing downtrend: sales had fallen so low that any uptick would register an increase, and that may very well have been the case in April, particularly if the existing home segment registers decreases for May, June, July, and August -- prime selling / family relocation months in the United States.

Sales of existing homes in April 2008 fell 1.0%, to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Friday, as inventories of homes swelled to a 23-year high.

Economists surveyed by Bloomberg News had expected April 2008 existing home sales to total a 4.85-million annualized rate. The March 2008 sales rate was revised higher to a 4.94-million annualized rate.

Even more telling, inventories -- unsold homes and condominiums -- rose to an 11.2-month supply at the current sales rate. A typical, healthy housing market has a three to four month supply of unsold homes on the market.

Further, the inventory of single family homes rose to 10.7-month supply - - its highest level since 1985. Meanwhile, the inventory of condominiums increased to a 14.2-month supply.

Also, the median sales price for houses and condominiums fell to $202,300 in April 2008, an 8% decrease from the $219,900 median recorded a year ago.

Sales of existing homes in fell 1.0% in March 2008, the National Association of Realtors announced Wednesday, as the prospect of continued home price declines discouraged potential buyers.

The NAR's existing home sales index declined to 83.0 in March 2008. The index totaled a revised 83.8 in February 2008, and stood at 103.9 in March 2007.

Economists surveyed by Bloomberg News had expected the March 2008 existing home sales index to drop to 83.8%.

Regional conditions vary

Conditions varied by region. In the Midwest, the index fell 10.4% in March 2008 to 74.1; in the West, the index fell 1.4% to 91.2, and in the South, it fell 0.1% to 84.9. In the Northeast, the index rose 12.5% to 80.8%.

Sales of existing homes fell slightly in March 2008, the National Association of Realtors announced Tuesday, as resales continued to lag amid the nation's worst housing slump in more than 15 years. It was the fourth existing home sales decline in the last five months.

Sales advanced at a 4.93-million-unit annualized pace in March 2008, the NAR said. Economists surveyed by Bloomberg News had expected March 2008 existing home sales to register a 4.95-million-unit annualized rate. The February 2008 existing homes sales statistic was revised to a 5.03-million-unit annualized pace.

Regionally, March 2008 existing home sales fell 6.5% in the Midwest, 3.5% in the South, and 2.2% in the West. Sales roses 2.2% in the Northeast.

Meanwhile, the U.S. median home price plummeted 7.7% to $200,700 on a year-over-year basis. The median price was $217,400 a year ago.

Sales of existing homes declined 1.9% in February 2008, the National Association of Realtors announced Tuesday. It was the third existing home sales decline in the last four months.

Economists surveyed by Bloomberg News had expected February 2008 existing home sales to decline 1.0%. The January 2008 existing homes sales statistic was revised higher to an increase of 0.3%.

Regionally, February 2008 existing home sales fell 9.8% in the West, 5.5% in the South, and 3.7% in the Midwest. Sales rose 3.2% in the Northeast.

Meanwhile, the aggregate U.S. existing-home price will probably decline by 1.4% to a median of $215,800 for all of 2008 before rising 3.7% to $223,800 next year, the NAR said.

The existing home sales statistic is considered a lead economic indicator because the metric tracks actual signings for the month reported, in this case, February 2008.

Economic Analysis: A sub-par February 2008 existing home sales statistic, but one not entirely inconsistent with the consensus estimate. Existing home sales remain generally weak, which is typical for an economy in recession and a housing market where potential buyers expect future price declines, and hence postpone home purchase decisions.

Existing home sales rose 2.9% in February 2008 to a seasonally-adjusted annual rate of 5.03 million units, the National Association of Realtors announced Monday. Economists surveyed by Bloomberg News had expected February 2008 existing home sales to total a 4.85 million unit annualized rate.

Sales are down 23.8% compared to a year ago. Meanwhile, inventories fell 3% to 4.03 million units, which represents a 9.6-month supply at the current sales pace.

The median sales price also plummeted by 8.2% compared to a year ago, to $195,900. February 2008 sales by region were as follows: Northeast, up 11.3%; Midwest, up 2.5%, South, up 2.1%, and the South, down 1.1%.

February 2008 sales of single-family homes rose 2.8%, while condo sales rose 3.7%.

Housing Sector Analysis: For a change, a good monthly existing home sales report. Sales did not rise dramatically, but the important point is that unit sales did not decline substantially in February 2008 either, and it's likely lower home sale prices are beginning to stimulate modest demand. Still, a word of caution to potential home buyers in the United States: median home sales prices are likely to continue to decline through at least Q3 2008. One month's rise in existing home sales is not nearly enough to suggest a trend, and inventories are likely to continue to rise given current foreclosure trends, and due to the approaching spring/summer period when many families planning to move list homes for sale.

U.S. pending homes sales were flat in January 2008, the National Associations of Realtors announced Thursday, in a statement, with the association also forecasting a gradual housing sector recovery in the second half of 2008.

Economists surveyed by Bloomberg News had forecast that January 2008 pending sales would fall 1%.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January 2008, held at a stable level of 85.9, unchanged from December 2007, but was 19.6% below the January 2007 reading of 106.8, the NAR said.

Regional stats

By region, the January 2008 Pending Home Sales Index was as follows: Northeast, down 4.1%; South, down 6.1%; West, up 13.0%; and Midwest, up 0.6%.

Sales of existing homes and condominiums in January 2008 totaled a seasonally-adjusted annual rate of 4.89 million units, the National Association of Realtors announced Monday. The January statistic was roughly in-line with the 4.84 million consensus estimate.

The January 2008 stat was also 0.4% lower than the revised 4.91-million-unit December 2006 annualized rate, and was also the lowest sales pace since the NAR started tracking combined sales in 1999.

Further, on a year-over-year basis, resales plunged 23.4% compared to January 2007.

Housing's doldrums continue

Economist Steve Affinito said the song remains the same regarding the U.S. housing sector.

Sales of existing U.S. homes fell more than forecast in December 2007, contributing to the largest yearly slump in housing in more than 20 years.

Purchases declined 2.2% to a seasonally-adjusted annualized rate of 4.89 million, the National Association of Realtors announced Thursday. Analysts had expected the annualized rate to fall to just 4.95 million.

Further, sales for 2007 declined 12.8%, the largest drop since 1982. There were 5,652,000 existing-home sales in 2007, the fifth highest year on record, but still 12.8% below the 6,478,000 transactions recorded in 2006.

Trying to see bright side

Economist Steve Affinito told BloggingStocks Thursday he's trying to see the bright side to the housing sector's slump, but it's hard to do so.

"Let's try to see a silver lining here, if we can. Housing had really robust sales growth for about four years, so the 2008 stat is facing really difficult comparisons, year-to-year," Affinito said. "That said, there's no denying that the housing sector is in slow-motion mode, with large inventories."

Sales contracts of previously-owned homes plunged -2.6% in November 2007, a stat that suggests the contraction in the housing sector will persist in the immediate months ahead.

The National Association of Realtors announced that the pending home index, which tabulates contracts signed for homes but not closed, fell 2.6% in November 2007. Economists had expected a 0.7% decline in November 2007. The index rose in September 2007 and October 2007.

Further, the index declined 19.2% during the previous 12 months. The index declined in 3 regions: -13% in the Northeast, -4.1% in the Midwest, -2.1% in the West, but increased +2.3% in the South.

U.S. Treasury Secretary Henry Paulson is on the wires again, this time predicting that the number of potential home-loan defaults "will be significantly bigger" in 2008 than in 2007.

In an interview with The Wall Street Journal (subscription required), Paulson said, "The nature of the problem will be significantly bigger next year because 2006 (mortgages) had lower underwriting standards, no amortization, and no down payments. He added that "We'll watch carefully mortgages that will be reset."

Home prices fall

Paulson's comments came before the National Association of Realtors announced that home prices had fallen in 51 of 150 U.S. metropolitan areas in Q3, with the median sales price falling to $220,800 in Q3 2007, compared to $225,300 in Q3 2006. The NAR also announced that home sales fell to an annualized rate of 5.42 million units, including single-family homes and condominiums, compared to a 6.29-million-unit annualized rate a year ago.

Fannie Mae doesn't expect the housing market to rebound until after 2008, according to an interview Chief Executive Daniel Mudd gave to Bloomberg News in which he offered a far bleaker assessement than the National Association of Realtors, which expects a rebound in the first quarter of next year.

"We don't think we hit a bottom until the end of '08 and then we have some period of time to work our way back up again,'' he told Bloomberg, adding that he expects U.S. home prices to fall 2 percent to 4 percent this year and even more next year.

Wow.

Does this give Ben Bernanke cover to cut interest rates a second time or even a third? Does this mean that the government is going to need to do more to help homeowners?

Stay tuned.