Prices of U.S. single-family homes fell in April from March but the pace of the decline moderated, suggesting stability is emerging in some regions, according to Standard & Poor's/Case Shiller home price indexes released on Tuesday.

An index of 20 metropolitan areas dipped 0.6 percent in April from March, after a 2.2 percent decline the month before, for an 18.1 percent downturn from a year earlier.

The month's slide was smaller than the 1.8 percent drop forecast in a Reuters poll.

S&P's index of 10 metropolitan areas declined 0.7 percent in April for an 18 percent year-over-year drop, after falling 2.1 percent month on month in March.

The rate of annual decline in these measures has improved, from 18.7 percent for both indexes in March.

While one month's data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions, David M. Blitzer, chairman of the index committee at S&P, said in a statement. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.

Blitzer said that the stock market has risen from March and consumer confidence gauges have turned higher, fostering improved sentiment in housing.

Thirteen of the 20 metro areas showed improvement in the annual returns in April compared with March, and every metro area except for Charlotte, North Carolina had a better monthly return, S&P said.

This is positive news for people who don't live in those speculative markets, said John Silvia, chief economist at Wachovia Securities in Charlotte. Housing is going to be less of a drag on the economy but it won't be adding to it as it traditionally does.

The April price declines tacked on to the severe price erosion that has slammed the U.S. housing market into its deepest downturn since the Great Depression.

Average home prices have wiped out six years of gains, returning to levels seen in mid-2003, S&P said.

The 20-year composite index has toppled 32.6 percent and the 10-city composite index has tumbled 33.6 percent from peaks in the second quarter of 2006.

Phoenix, Las Vegas and San Francisco were the three worst performing metro areas in terms of annual declines, as big as 35.3 percent in Phoenix. Denver, Dallas and Boston fared the best, with single-digit declines.

With the exception of Dallas, all 20 metro areas have posted double-digit price declines from their peaks. Ten of the areas have fallen more than 30 percent and two -- Phoenix and Las Vegas -- by more than 50 percent.

In housing, the worst is behind us, but it is an awfully deep hole we will have to climb our way out of, said Kevin Flanagan, fixed income strategist, global wealth management, at Morgan Stanley in Purchase, New York.

(Additional reporting by Richard Leong and John Parry; Editing by James Dalgleish)

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