Home Prices Plunge; Investors in Denial

The housing market is really stretching for some good news.

Home prices plunged 18.1% in April compared with the same month in the prior year, but shares of home builders were relatively stable during morning trading, as investors clung to the only bright spot: April is the third straight month that the decline did not set a record.

Talk about setting the bar at ankle-height.

Regardless, industry investors and analysts are taking this to mean that the housing market is stabilizing. Yearly losses in 13 metros improved compared to March, and eight of the 20 posted price gains from March.

But the 20-city Case-Shiller Index is off almost 33% from its peak in the second quarter of 2006, which means home values are now around 2003-levels.

Hardest hit remain Phoenix and Las Vegas, where home prices have lost more than half their value since their peaks.

Shares of KB Home(KBH Quote) fell 1% to $13.92, Lennar(LEN Quote) dropped .4% to $9.67, Centex(CTX Quote) dropped .2% to $8.6, MDC Holdings(MDC Quote) dipped 1% to $30.36, Toll Brothers (TOL Quote) was off .4% to $17.07 and Pulte Homes(PHM Quote) slipped .3% to $8.93.