al housing prices fell 10.2% in April compared to a year ago, representing the smallest year-over-year decline recorded in 2009, according to newly released data from First American CoreLogic and its LoanPerformance Home Price Index (HPI). April's decline was a 0.5% improvement over the 10.7% decline in March. The rate of national price declines peaked at 11.9% in January 2009 and has since been trending down. While April's rate is the lowest year-to-date, the May preview data suggests further improvements in the rate of decline – perhaps back to the single digits. "There is still a great deal of uncertainty with the housing market and the economy in general. But the rate of change in home-price declines is beginning to show signs of not only a bottoming, but an improvement in both nominal and real terms – which is the more important indicator, because real prices adjust for the distortions caused by inflation or deflation," says Mark Fleming, chief economist for First American CoreLogic. The improvement in home-price declines has been especially noticeable when adjusting for inflation. The differences between nominal and real (inflation-adjusted) home-price changes are rapidly widening due to the deceleration of inflation in 2008 and the recent outright deflation as of May 2009. Real home-price declines peaked at 18.% in August 2008. In contrast, April 2009 data put the real price decline at 8.4%, a nearly 10-percentage-point improvement in real home prices since last summer, thanks to a slowing of the nominal price decline and deflation. The shifts among the top five states have continued, with Nevada (26.1% decline) remaining the top-ranked state for annual price depreciation, but Florida (23.2%) supplanted California and became the second-ranked state for price depreciation. After being the top-ranked state for 20 consecutive months – May 2007 through December 2008 – California's home price declines (22.7%) have improved, placing the state in third place in April, ahead of fourth-ranked Arizona (20.5%). The rapid deteriorations of home prices in Illinois (17.4%) put that state in fifth place for the first time during the downturn. SOURCE: First American Co