A federal report suggests that O'ahu home prices may be in the midst of a rebound, joining other tentative indicators that a housing market turnaround is shaping up.

The Federal Housing Finance Agency yesterday reported that O'ahu single-family home values in the fourth quarter of last year declined 5.8 percent compared with the fourth quarter of 2008.

While the home value figure was negative, it was smaller than the third-quarter decline. In fact, the recent result was the first time since decreases began in the second quarter of 2008 that the size of the decrease was smaller than the previous quarter's decrease.

The fourth-quarter decline compared with a 6.5 percent decline in the third quarter and a 5.9 percent decline in the second quarter. The decline in the first quarter of last year was 4.7 percent.

To be sure, one quarter of sale data don't make a trend. So it's not apparent yet that a price rebound is in progress. Also, even if a recovery of prices is under way, it remains to be seen at what rate a recovery progresses.

But the suggestion from the report that prices may have started to stabilize echoes other occurrences in the market.

The Honolulu Board of Realtors reported that the median price of previously owned single-family homes sold in January rose 10.8 percent to $597,500 from $539,500 a year earlier.

Local economist Paul Brewbaker of TZ Economics recently revised his forecast for O'ahu home prices from a slightly negative outlook this year to 1 percent growth.

The Federal Housing Finance report is considered by some to be a good broad measure of the housing market because of how it calculates values.

The agency uses sale and refinancing values of homes in one quarter compared with sale or refinancing value for the same properties a year earlier.

Because of the same-home methodology, the federal data are considered by some industry followers to represent inherent property values better than median sale prices reported by the Realtor association.

The median price is a point at which half the sales are for a higher price and half for a lower price, which is influenced by the variety of homes sold. For instance, the median would be higher if newer and bigger homes make up more of the sales, or lower if more older and smaller homes are sold.

However, the federal report has a major downside in that it represents relatively few transactions because it focuses on repeat sales of the same homes.

Another constraint is that it's limited to homes bought with conforming mortgages purchased or backed by Fannie Mae or Freddie Mac, which excludes a significant part of the market financed by subprime and jumbo loans. A good deal of the depression in the local housing market has been concentrated on properties bought with subprime loans.

Federal Housing Finance is an agency responsible for regulating the two mortgage finance giants taken over by the federal government last year.

HONOLULU: 199 OF 299

Among 299 metropolitan areas nationally, Honolulu, or O'ahu, ranked 199th, meaning 100 other areas had greater home value declines. Only 38 markets had home value gains.

The strongest market was Terre Haute, Ind., with a 3.1 percent increase. The worst market was Bend, Ore., with a 20.6 percent decline.

The agency also reported home values by state based on same-home purchases but not refinancing. The figure for Hawai'i was down 13.1 percent in the fourth quarter compared with a year earlier. Only one state, Nevada, had a bigger decrease, at 17.3 percent.

Hawai'i's poor ranking is largely a result of a high concentration of foreclosures in Neighbor Island resort markets.

The national average for all states was a 1.2 percent decline. The state with the best value change was Oklahoma with a 3.5 percent gain.