U.S. Housing Prices Fall 15.3% in April

U.S. housing prices showed a 15.3% year-over-year decline in April, according to a closely watched U.S. housing data set released Tuesday.

The S&P/Case-Shiller Home Price Index, which tracks 20 major cities across the U.S., said the drop was the largest since the index's inception in 2000.

Falling housing prices remain an issue for homebuilders, who will have a hard time turning profits until prices stabilize.

Nonetheless, Credit Suisse initiated coverage of the homebuilders Tuesday with an overweight rating.

The bank's analyst, Daniel Oppenheim, has outperform ratings on Centex (CTX Quote - Cramer on CTX - Stock Picks), DR Horton (DHI Quote - Cramer on DHI - Stock Picks), KB Home (KBH Quote - Cramer on KBH - Stock Picks), Pulte Homes (PHM Quote - Cramer on PHM - Stock Picks), Ryland (RYL Quote - Cramer on RYL - Stock Picks) and Toll Brothers (TOL Quote - Cramer on TOL - Stock Picks); neutral ratings on Lennar (LEN Quote - Cramer on LEN - Stock Picks), MDC Holdings (MDC Quote - Cramer on MDC - Stock Picks) and NVR (NVR Quote - Cramer on NVR - Stock Picks); and underperform ratings on Hovnanian Enterprises (HOV Quote - Cramer on HOV - Stock Picks) and Meritage Homes (MTH Quote - Cramer on MTH - Stock Picks).

Oppenheim, who formerly covered the homebuilder stocks at Bank of America, said tough conditions will continue for the homebuilding industry, "but an inflection point in housing is likely in spring 2009 as inventory levels will likely start to decline."

Risks for the sector remain rising mortgage rates and homebuilders being unable to reduce their selling costs to manageable levels, he said.