Home prices in the conforming and jumbo conforming housing market continued to fall during May, dropping 0.3 percent on a seasonally-adjusted basis from April and ending the month off 4.8 percent from year-ago average prices, according to data released Tuesday by the Office of Federal Housing Enterprise Oversight. Leading the month-over-month decline in housing prices during May were the eight states that comprise the South Atlantic region — Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia (as well as Washington, DC) — which saw prices fall by 1.2 percent between April and May. Not far behind were Arkansas, Louisiana, Oklahoma, Texas, the so-called West South Central census region — surprising, to say the least, given the strong housing performance that has typically been ascribed to the Lone Star State in particular throughout the current housing mess. But other regions saw a monthly increase, as well, something that OFHEO James Lockhart was willing to sound hopeful on. “It is very hard to draw conclusions from a one-month number, especially in these uncertain times; but the numbers in the Pacific, East and West North Central Divisions may be good signs,” he said. “The HPI is based upon mortgages made by Fannie Mae and Freddie Mac, which, on average, are generally higher quality than those in other indexes.” The hard-hit Pacific region, which includes California, has seen prices fall 14.5 percent year-over-year; but prices rose 0.3 percent in the region during May, OFHEO said. Overall, the May 2008 results show that housing prices are roughly equal to where they were in November 2005; at least for homes priced within the conforming limits. Next week, Standard & Poor’s releases its own complement to the OFHEO data in the form the S&P/Case-Shiller housing price index, which tracks a wider set of loans sample outside of the conforming area (and tends to show more severe pricing corrections taking place outside of Fannie Mae and Freddie Mac’s lending market). For more information, visit http://www.ofheo.gov. Disclosure: The author was long FRE and held no positions in FNM when this story was written; further indirect holdings may exist, however, via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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