UPDATE: US Home Prices Fell Seasonally Adjusted 0.5% In 1Q

U.S. home prices dropped once again in the first quarter, but by a smaller amount than in the previous quarter, a government agency reported Wednesday.

U.S. home prices fell a seasonally adjusted 0.5% in the first quarter of 2009, compared with a 3.3% decline in the fourth quarter of 2008. Sales prices fell a seasonally adjusted 7.1% from the first quarter of 2008 to the first quarter of 2009, the Federal Housing Finance Agency said.

"Our latest data are consistent with growing evidence that housing market conditions may be stabilizing in some parts of the country," FHFA director James B. Lockhart said in a statement.

The FHFA tracks U.S. home prices through its purchase-only home price index. The index reflects the sales prices of home purchases financed with Fannie Mae (FNM) and Freddie Mac (FRE) mortgages.

Prices fell across most regions of the country in the last quarter, with the mountain states experiencing the sharpest declines. The New England U.S. Census Division saw prices increase by 1.3%.

Of the 25 most populated metropolitan areas, Miami-Miami Beach-Kendall, Florida Metropolitan Division was hit the hardest. Prices in that area dropped by 37.6% from the first quarter of 2008 to the first quarter of 2009. Meanwhile, prices were the most resilient in the Dallas-Plano-Irving, Texas Metropolitan Division, rising 0.1% over that period.

-By Jessica Holzer, Dow Jones Newswires; 202-862-9228; [e-mail]