Forbes.com

Carl Gutierrez

The housing market is looking far better than it was a year ago, but there are troubling signs in renewed price weakness.

"It looks a little like a double-dip already," economist Robert Shiller, the co-creator of the Case-Shiller index, said in an interview with the Associated Press. "There is a very real possibility of some more decline."

The Standard & Poor's/Case-Shiller 20-city home price index declined 0.5% in March from the prior month. In a broader sense, prices were up 2% in the first quarter from a year earlier, weaker than the 3.2% gain predicted by Wall Street, but fell 3.2% from the prior quarter.

The report notes that while housing prices have rebounded from crisis lows, they have recently seen renewed weakness as tax incentives are ending and foreclosures are climbing. “The housing market may be in better shape than this time last year, but when you look at recent trends there are signs of some renewed weakening in home prices,” said David Blitzer, Chairman of the Index Committee at Standard & Poor’s.

Blitzer said that while the year-over-year results saw 18 of the 20 cities surveyed and both the 10-city and 20-city indexes improve, the most recent monthly data are not as encouraging. Blitzer notes that the past few months have produced relatively weak reports, as 13 cities surveyed and the two composites have seen their prices drop in March over February, while Boston was flat.

"It is especially disappointing that the improvement we saw in sales and starts in March did not find its way to home prices," Blitzer said. "Now that the tax incentive ended on Apr. 30th, we don’t expect to see a boost in relative demand.”

Despite the negative commentary offered in the report, Teresa Chen of Barclays Capital argues that the broad trend for home prices remains on an upward path. "We expect the choppiness in the data to persist in the near term, but look for the broader underlying trend in both the quarterly national index and the monthly composite-20 index to remain positive," Chen says. Chen had a similar reaction Monday to data indicating that existing home sales rose 7.6% in April. (See "Old Homes Finding New Buyers.")

Despite spending most of the day in the red, residential construction companies managed to close the day on the upside, as M.D.C. Holdings ( MDC - news - people ) rose 0.1%, while Hovnanian Enterprises ( HOV - news - people ) gained 0.2% and the Ryland Group ( RYL - news - people ) increased 0.4%.

Other builders were up as well Tuesday, with D.R. Horton ( DHI - news - people ) rising 0.3%, while PulteGroup ( PHM - news - people ) gained 1.9%, though Lennar ( LEN - news - people ) and KB Home ( KBH - news - people ) both ended down 0.8% and 0.1%, respectively.