So Who's Right?

Home prices fell at a record pace in May in several areas.  As you can see in the article below, they are not passing judgement yet. So who's right? The doom and glooms or the half-glass fulls?

NEW YORK (Reuters) - Prices of U.S. single-family homes plunged at a record pace in May from a year earlier, with each of the 20 regions monitored showing annual declines for a second month, according to the Standard & Poor's/Case Shiller home price indexes reported on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in May from April, bringing the measure down 15.8 percent from May 2007.

The decline was slightly less than expected and not as severe on a monthly basis as in April. Seven regions showed increases on a month-over-month basis, providing a "possible bright spot" for U.S. housing that otherwise continues to weaken, S&P said.

"We are not going to get too excited about the data yet as it is not seasonally adjusted and prices tend to be higher during the spring selling season," said Michelle Meyer, an economist at Lehman Brothers in New York.

Falling home prices are seen at the crux of a growing crisis in foreclosures as homeowners find themselves "underwater," with the value of their homes now less than their loans.

Expectations that prices will continue to fall into 2009 also makes refinancing of loans tougher, leaving homeowners in high-cost mortgages peddled during the housing boom.

Economists surveyed by Thomson Reuters expected the monthly and annual drops would be 1 percent and 16 percent, respectively.

S&P said the composite index of 10 metropolitan areas fell 1 percent in May, for a 16.9 percent year-over-year drop.

Regions that saw some of the largest gains during the housing boom, such as Miami and Las Vegas, were the worst performing markets in May. Miami home prices fell 3.6 percent in May from April for a 28.3 percent annual drop. In Las Vegas, prices in May slumped 2.9 percent, for a 28.4 percent decline from a year earlier.

(Reporting by Al Yoon; Editing by Theodore d'Afflisio)