By Vicki Needham - 06/22/11 04:19 PM EDT
The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.
The housing market is weighing on the nation's economic recovery and will likely need another two years to return to pre-recession levels, housing sector experts have said.
A growing number of foreclosures hitting the market — 1 million last year and probably upward of 1.2 million this year — continue to push prices down.
CoreLogic reported on Wednesday that the residential shadow inventory declined to 1.7 million units in April, representing five months of supply.
That's down from 1.9 million units, also a five months’ supply, from a year ago.
The decline was due to fewer new delinquencies and the high level of distressed sales, which helped reduce the number of outstanding distressed loans.
The reason for fewer delinquencies is likely tied to state and federal investigations into the mortgage practices at several of the nation's largest banks, creating a backlog that could create an increase within the next several months.
The shadow inventory peaked in January 2010 at 2 million units, an 8.5 months supply, and 18 percent lower than the peak as of April, CoreLogic reported.
Seasonally adjusted monthly price changes from March to April ranged from -1.3 percent in the Mountain Division to +2.2 percent in the New England Division, FHFA reported.
Earlier this month, CoreLogic's Home Price Index showed that prices increased by 0.7 percent between March and April, the first such increase since the homebuyer tax credit expired at the end of April 2010.
However, national home prices, including distressed sales, declined by 7.5 percent in April compared with April 2010 after declining by 6.8 percent in March compared with March a year ago, CoreLogic reported.