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Home prices in 20 major metropolitan areas probably fell at a slower pace in March, pointing to a moderation in the housing slump, economists said ahead of a report today.

The S&P/Case-Shiller home-price index fell 18.4 percent from a year earlier following an 18.6 percent drop in February, according to the median of 23 forecasts in a Bloomberg News survey. Another report may show consumer confidence climbed to a six-month high in May.

Falling prices and mortgage rates have made homes more affordable, stemming the slide in sales and preventing the real estate recession from deepening. Even so, rising unemployment and record foreclosures will keep housing from staging an immediate recovery, maintaining pressure on property values.

“Things are stabilizing and the inventory of unsold homes is starting to shrink,” said John Herrmann, chief economist at Herrmann Forecasting in Summit, New Jersey. “There’s a slightly better matching of buyers and seller in the market and that means sellers have to use slightly less incentive to get their homes sold.”

The S&P/Case-Shiller gauge is due at 9 a.m. New York time. Estimates in the Bloomberg survey ranged from drops of 17.9 percent to 18.9 percent. March would mark a second month of improvement after the measure decreased by a record 19 percent in January.

Confidence Improves

At 10 a.m., the New York-based Conference Board will probably report that its index of consumer confidence rose to 43, the highest since November, from 39.2 in April, according to the Bloomberg survey. Estimates ranged from 38.5 to 47. The measure set a record low in February.

The home-price index figures aren’t adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month-to-month cash advance.

Foreclosure-driven declines in prices have spurred resales. Economists forecast existing home sales rose to a 4.66 million rate in April, according to the survey. The National Association of Realtors’ report is due tomorrow.

About half of March home resales were of distressed properties and first-time buyers accounted for about 51 percent, the group said last month.

Foreclosure filings in the U.S. rose to a record for the second consecutive month in April, RealtyTrac Inc. said May 13. A total of 342,038 properties received a default or auction notice or were seized. One in 374 households got a filing, the highest monthly rate since the property data service began issuing such reports in 2005.

More Deposits

While the rise in foreclosures is likely to keep hurting prices, some companies are seeing signs demand is stabilizing.

Toll Brothers Inc. Chief Executive Officer Robert Toll said May 20 that deposits for the company’s new homes rose in the fiscal second quarter from a year earlier. That makes him “slightly more optimistic,” he said on a conference call.

Since the week ended March 22, per-community deposits exceeded those made last year in seven of the past nine weeks, Toll said. The average sale price fell to $563,000 in the second quarter from $575,000 in the previous three months.

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