PREVIEW-S&P/Case-Shiller to show Feb dip but annual gain

* What: S&P/Case-Shiller home price indexes for February

* When: Tuesday, April 27, 9 am EDT (1300 GMT)

REUTERS FORECASTS:

* On a seasonally adjusted basis, the S&P composite index
of 20 metropolitan areas is seen having slipped 0.1 percent in
February, after a 0.3 percent rise in January that was the
eighth straight monthly increase, based on the median forecast
in a poll of 17 economists.

* The median forecast is for the S&P 20-city index to have
declined 0.3 percent in February, non-seasonally adjusted,
after a 0.4 percent drop in January, based on a survey of six
economists.

* The median forecast is for the 20-city index to have
risen 1.2 percent year-over-year in February, non-seasonally
adjusted, after a 0.7 percent drop the prior month, based on a
poll of 24 economists. This would be the first annual increase
since December 2006,

FACTORS TO WATCH:

U.S. home prices likely eroded in February versus January,
as the housing market was slammed by harsh winter weather
nationwide.

But the S&P/Case-Shiller home price index is seen
increasing for the first time on an annual basis in more than
three years, a milestone in a market emerging in fits and
starts from its deepest downturn since the Great Depression.

The 20-city and 10-city composite indexes last posted an
annual price increase in December 2006, S&P said.

A year-over-year increase, combined with surprisingly
strong home sales momentum in March, would be encouraging for a
long beleaguered market still concerned about what happens
after federal tax credits end on April 30.

Buyer confidence has been shaken during the nearly four
years since home prices peaked. Prices have toppled about 30
percent on average since then.

Signs of price stabilization should bolster confidence
among many potential buyers who stayed away, worried that a
home they might buy seemed certain to soon lose value.

The low prices and U.S. mortgage rates that hover around 5
percent, near historic lows, set the stage for a March spike in
sales of new and existing houses.

Buyers that kept a low profile during the first two months
of the year rushed in March to lock in low loan rates and
prices before the federal tax credits expires. Borrowers
qualified for tax credits of up to $8,000 need to sign
contracts by the end of April and close on loans by June 30.

Sales of new houses surged almost 27 percent last month to
an eight-month high, posting the biggest monthly increase since
April 1963, after falling the four prior months.

U.S. housing starts in March rose to their highest level
since November 2008 and permits to build jumped to a 17-month
high.

Existing home sales increased 6.8 percent in March

The lingering critical obstacles to recovery in home prices
and housing overall are unemployment and a record stockpile of
foreclosed properties that still need to hit the market.

Unemployment has improved from its double-digit peak but
has held at 9.7 percent for three straight months.

MARKET IMPACT:

The bond markets are widely factoring in a price decline
for February as well as an annual increase, and could weaken if
prices unexpectedly rise in the month or post a surprisingly
large annual increase. Most market players maintain a
longer-term view, monitoring the sales pace once the federal
tax incentive is stripped away.

Stock Market Research Tools

(Reporting by Lynn Adler; polling by Bangalore Polling
Unit)

PREVIEW-S&P/Case-Shiller to show Feb dip but annual gain