The latest U.S. housing market data—as measured by the two composite S&P/Case-Shiller Home Price indexes—suggests the U.S. housing market is stabilizing, though forecasting a trend ahead remains difficult.

"The market is worried about the outlook,” Robert Shiller, Yale University professor of economics and MacroMarkets chief economist, said. “It is not predicting home prices will go up or down. It’s very ambiguous right now.”

While the annual rate of price declines has slowed significantly in the last quarter of 2009—the S&P/Case-Shiller U.S. National Home Price Index posted a 2.5 percent decline in the fourth quarter of 2009 vs. the fourth quarter of 2008—values remain in line with mid-2003 levels, way off their 2006 highs.

The housing market is “building a trading range,” David Blitzer, chairman of the Index Committee at Standard & Poor’s, said.

Currently, the one-year declines for the 10-city and 20-city composites stand at 2.4 and 3.1 percent, respectively—up from respective one-year declines of 4.5 and 5.3 percent as of November. Both composites have shown steady improvement throughout 2009.

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