Home prices fall. Federal tax breaks still muddy picture.

The Case-Shiller 10-city index shows home prices down 0.5 percent since August.

Home prices are starting to fall, even with the now-expired tax credit for home buyers still clouding the outlook.

Today’s release of the S&P/Case-Shiller (CSI) home price indices for September reported that the non-seasonally adjusted Composite-10 price index declined 0.52% since August indicating that in the wake of government's housing tax gimmick, prices continue to follow sales down.

It's important to recognize that as we continue to move away from the government's tax sham expiration, the home sales and price movement fueled by that epic monstrosity are left further and further behind.

Yet, it will be some time before the effects are completely expunged from the CSI as its methodology uses a three month rolling average of the source data and further, as BostonBubble points out, since Congress moved to extend the closing deadline for the credit until September, the CSI data may not be free of the distortion until the February 2011 release!

In any event, you can see from the latest CSI data that the price trends are starting to slump and, as I recently pointed out, the more timely and less distorted Radar Logic RPX data is already capturing notable price weakness nationwide.

The 10-city composite index increased 1.56% as compared to September 2009 while the 20-city composite increased just 0.59% over the same period.

Topping the list of regional peak decliners was Las Vegas at -56.90%, Phoenix at -52.88%, Miami at -48.15%, Detroit at -44.44% and Tampa at -42.69%.

Additionally, both of the broad composite indices show significant peak declines slumping -28.74% for the 10-city national index and -28.58% for the 20-city national index on a peak comparison basis.

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