Two measures of home prices published on Tuesday showed a drop of just over 18% in April from year-ago levels, leading some observers to voice optimism that the worst of the price declines may be over.

Standard & Poor’s said its 10-City and 20-City Composite Home Price Indexes fell 18% and 18.1% respectively from April 2008 levels.

In March both gauges fell 18.7% from a year ago and in January they fell in excess of 19% -- a record.

"This is a notable improvement from the 18.7% y/y [year over year] drop over the prior two months and the slowest pace of decline since October," according to a report published by analysts at Barclays Capital. "The rate of decline decelerated even more dramatically on a m/m [month over month] basis, with the seasonally adjusted index down 0.9% m/m, less than the 2.2% March decline and the smallest drop since August 2007."

The 20-city composite is now down 32% from the peak in the summer of 2005 and has returned to mid-2003 levels.

Barclays market watchers noted that while much cannot be read into a single month's worth of data, "this was a decidedly positive report. We continue to look for home prices to fall further, likely through the second half of next year, but for the rate of decline to continue to slow."

David Blitzer, chairman of the index committee at S&P, said in a press release that “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.”

When it comes to annual declines in prices the three worst metropolitan statistical areas were Phoenix, which saw a 35.3% drop in prices, Las Vegas, which saw a 32.2% drop in prices, and San Francisco, where prices plummeted 28%.

Denver, Dallas and Boston fared better with annual declines ranging from 4.9% to 7.7% in April. Record annual declines in home prices, meanwhile, were seen in Charlotte, Chicago, Cleveland, New York, Portland and Seattle.