Dallas-Fort Worth home prices held almost steady in the latest Standard & Poor's/Case-Shiller Home Price Index – down 1.2 percent from a year ago.

TOM FOX/DMN

Home prices in the Dallas area dropped slightly in the latest Standard & Poors/Case-Shiller index, but almost all other cities surveyed fared worse.

It was one the smallest annual declines in more than a year in the closely watched index of home prices around the country.

September prices were down 0.7 percent from August, ending a six-month string of month-over-month gains.

"The month-to-month changes will likely continue to be somewhat bumpy over the coming year," said David Brown, who heads the Dallas office of housing analyst Metrostudy Inc. "I don't think we will see much of an increase in home values until job growth returns and the number of foreclosures begins to drop."

Nationwide, prices fell 9.4 percent in September from a year earlier in the 20 cities Case-Shiller tracks.

The numbers continue to show gains from earlier in the year, analysts said.

North Texas home prices are about 7 percent higher in the Case-Shiller index than they were at the bottom of the market in February.

"We have seen broad improvement in home prices for most of the past six months," Standard & Poor's David M. Blitzer said Tuesday in the report. "However, the gains in the most recent month are more modest than during the seasonally strong summer months."

Fewer cities saw month-to-month improvements than in previous reports.

Some markets are still suffering sizable declines. Home prices in Las Vegas were down 28.6 percent from a year earlier, and prices were off 21.8 percent in Phoenix.

Dallas and Denver – both with a 1.2 percent annual drop – tied for the markets with the smallest price declines.

The Case-Shiller numbers for D-FW are in line with local housing market statistics that show prices in North Texas are down about 1 percent from a year ago.

Case-Shiller tracks the prices of typical single-family homes. The index does not include condominiums and townhouses. It only covers pre-owned properties – no new construction.

The researchers compare sales of specific properties over time.

Dallas-area home prices were down 0.28 percent for the third quarter in another index also released Tuesday by the Federal Housing Finance Agency. The federal report uses a narrower housing sample than Case-Shiller, focusing on homes financed by government-sponsored mortgage companies Fannie Mae and Freddie Mac.

Dr. James Gaines, an economist with the Real Estate Center at Texas A&M University, said he still expects the decline in prices to slow and hit bottom in the next few months.

"All this will depend on what foreclosures do in the next few months," Gaines said. "So far, there is no real relief in sight for this part of the market."

Indeed, 11 percent of Texas homeowners with mortgages owe more than the house is now worth, according to a new study by First American CoreLogic. Another 6 percent of Texas mortgage holders are close to going underwater as the value of their homes drops, the California-based research firm said.

But the Texas rate is much less than 23 percent of U.S. homeowners who now owe more than they could sell their property for. That adds up to almost 11 million households.

In Texas, almost 350,000 home loan holders are upside down.

"Negative equity continues to be pervasive and to impact almost every segment of the housing market," Mark Fleming, chief economist with First American CoreLogic, said in the report.

"The recent improvement in home prices this past spring and summer has slowed the increase in negative equity, but it will take a significant rebound in home prices, which we are not expecting, to offset the dampening effects of negative equity in the most depressed states."

The situation is worst in Nevada, where 65 percent of home borrowers have negative equity. In Florida, almost 45 percent of mortgage holders owe more than their property is worth.