Recent reports came out showing that US home prices are falling at an accelerating pace and that fewer Americans are planning to buy a home anytime soon. This suggests more home price declines in the months to come. However, taking a contrary view in that it is always darkest before dawn, this could perhaps be the bottom of the housing market and a great time to buy the home you thought was out of your reach a few months ago. With sellers forced to cut prices, buyers clearly have the upper hand in today's market. Some highlights and analyst comments on the recent housing statistics from the Wall Street Journal :

- The Standard & Poor's/Case-Shiller index for the first quarter showed prices for existing homes nationwide declined 14.1% from a year earlier, compared with a year-to-year drop of 8.9% in the fourth quarter. A separate S&P index that tracks 20 major metropolitan areas on a monthly basis showed home prices dropped 14.4% in March from a year earlier and 2.2% from February.

- Sales of new homes last month rose 3.3% from March. But sales remain well below year-earlier levels and, with a glut of unsold homes on the market, any significant improvement in the market remains down the road. Home prices nationwide are now 16% below their peak in the second quarter of 2006. Prices rose almost 90% from the beginning of this decade to that peak and now are at levels seen in the third quarter of 2004. Despite the declines, prices are still almost 60% higher than at the start of the decade.

- David Blitzer, who oversees indexes at S&P, said a turnaround in prices won't be visible until several more cities start showing monthly price rises. "Given the massive amount of supply that's out there, I'm not convinced we're at the bottom yet," Mr. Blitzer said. "It'll be at least a few more months."

- Many analysts expect prices to decline an additional 10% or more before hitting bottom as the housing market is battered by tighter ending standards and a wave of foreclosures that is boosting supply.

- Consumers' souring mood about the economy is contributing to the weak outlook for housing. In a survey of 5,000 households by the Conference Board, just 2.1% of respondents said they plan to buy a home in the next six months, down from 2.5% last month and 3.4%

Sounds quite gloomy doesn't it? One thing to remember is that the statistics are backward looking (i.e. reporting on the past) and that to be an astute buyer you need to be forward looking (what is going to happen). I think the next few months will be a turning point for the US housing market as the economy recovers and oil prices decline heading into the North American winter season. Recent reports also showed a number of foreigners more interested in buying US property given attractive valuations and potential returns. So if you find your dream home, negotiate for the best price and look to buy it sooner than later. Interest rates are low and if you have a good credit record you may never have a better time to buy than you will in the upcoming months.

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