Average house price gains in the USA fell by 2.2% in August 2010 in relation to the previous month and are likely to continue to decline, however they should not reach the market lows seen in 2009 according to Clear Capital.

Nationally, year on year average price gains remained positive, although they slowed to 6.1%, with 15 of the major metropolitan areas seeing continuing to post double-digit quarterly gains, represented largely by the volatile Midwest and South regions.

Dr. Alex Villacorta, senior statistician, Clear Capital, said: "We continue to see softening of home prices, due in large part to the buyer pullback after the expiration of the tax credit.

"Overall, prices look poised to continue their deceleration with a likely drop into negative territory by the end of the year. But keep in mind that the price gains we experienced over the past two years are providing a cushion against prices going into double dip territory, meaning it is unlikely well see prices below their 2009 lows this year," said Villacorta.

A national double-dip would only occur if prices dropped below their 2009 lows. This would represent a complete direction change and a decline of 11.7% from current levels. So unless a meltdown similar to that of late 2008 happens, it is unlikely prices would reach new record lows before spring 2011 at the earliest.

Dr. Villacorta added: "As we head into the final months of the year it will be interesting to see how markets respond to an environment without any buyer incentives. We are observing local markets that are within a few miles of each other diverging in their response to the current housing climate - some are showing strong, stable growth and others have yet to reach a price bottom. All of this points to the fact that recovery in the housing market will occur segment by segment in micro markets around the country."