Data through December 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, show that the U.S. National Home Price Index declined by 3.9 percent during the fourth quarter of 2010.

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The National Index is down 4.1 percent versus the fourth quarter of 2009, which is the lowest annual growth rate since the third quarter of 2009, when prices were falling at an 8.6 percent annual rate. As of December 2010, 18 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were down compared to December 2009. Both Los Angeles and San Francisco reported negative annual rates of return in December, leaving San Diego and Washington DC as the only two cities where home prices are increasing on a year-over-year basis, +1.7 percent and +4.1 percent, respectively.

“Despite improvements in the overall economy, housing continues to drift lower and weaker.” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Unlike the 2006 to 2009 period when all cities saw prices move together, we see some differing stories around the country. California is doing better with gains from their low points in Los Angeles, San Diego and San Francisco. At the other end is the Sun Belt – Las Vegas, Miami, Phoenix and Tampa. All four made new lows in December.”

Six cities showed an improvement in their annual growth rates in December as compared to November 2010 – Charlotte, Chicago, Cleveland, Dallas, Denver and Washington DC. However, for five of these cities the improvement only means their annual rates are less negative than what was reported in November.

Eleven MSAs posted new index level lows in December 2010, since their 2006/2007 peaks. These cities are Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Portland (OR), Seattle and Tampa. Nine of these cities had also posted lows with November’s report as well. New York and Phoenix are the new entrants to this group with December’s data.

The 10-City and 20-City Composites were down 0.9 percent and 1.0 percent, respectively, from their November levels. They are now only 3.9 percent and 2.3 percent above their April 2009 troughs, respectively. Back in July 2010, they were +7.9 percent and +6.9 percent above the troughs, respectively. This reinforces the fact that the latter half of 2010 has been marked by a drop in home prices across the nation.