How low can the market go? For real estate, some economists say, an end to the seemingly endless decline in housing values might be in sight. When? Not immediately. At the moment, prices are still dropping. In 20 large cities, prices fell 0.8 percent in March from the previous month, according to the Standard & Poor’s Case-Shiller Home Price Index. That pushed the closely watched index below its level of two years ago to a new low, and put it 33.1% under its July 2006 peak.

Few analysts expect housing prices to rebound anytime soon. But quite a few are predicting that the market will stop getting worse, which will be a major improvement all by itself. Some analysts think the downtown of the housing prices is beyond us, however some expect the market to slip another 5%. The national housing index, which is reported quarterly, fell 4.2 percent in the first quarter after a drop of 3.6 percent in the fourth quarter of 2010. This, too, is a new recession low.

Twelve of the 20 cities in the index hit a post-bubble low in March. Washington, D.C., was the only city where prices rose both in March and over the last year.

Housing prices are now back to where they were in mid-2002 even before taking inflation into account. Such a decline was unimaginable to the boosters and many of the analysts in the middle of the boom, who were fond of saying that house prices never fell on a national basis. But as credit dried up and the easy refinances disappeared, the foreclosures began. Prices fell sharply in late 2006, 2007 and 2008.

The market turned around in 2009, prompting hopes that the worst was over. A government tax credit proved wildly popular, but the declines resumed after its expiration a year ago.

Some economists think there are still relatively large drops to come. Dean Baker, co-director of the Center for Economic and Policy Research, expects a 6 to 8 percent fall during the rest of the year. “There are a lot of forces pushing prices downward,” he said.

One of them is the excess number of houses. Builders built too much during the boom, and the mania for second and third homes has sharply diminished. New household formation will soak up the supply, but that will take years.

The estimated excess housing supply compared the excess in April 2010, which was about 1.8 million units, but probably several hundred thousand fewer in May 2011.

The wild card in all of this is consumer confidence. The United States Conference Board reported Tuesday that its consumer confidence index unexpectedly fell to 60.8 in May from a revised 66 in April. Analysts had forecast a one-point rise, but the mood turned hesitant. The May level is the lowest since the fall. People without confidence in the economy and their own prospects tend to put off major purchases.

This story originally appeared in The New York Times on June 1, 2011, written by David Streitfeld