Dec 15

Home Prices To Decline Slightly Until Second Half 2012




Fiserv, a financial services technology company that generates the Case Shiller Home Price Index, released their Home Price Insights November 9th. In a nutshell the release had two main points:

  • They are forecasting that home prices, at a national level, will fall 3.6% during the year ending in mid-2012 and will then rebound by 2.4% over the next year.
  • They point out that home affordability is the lowest on record as measured by the ratio of median mortgage payments to median family income. In fact mortgage payments on a median priced home are now 40% lower than they were at the peak.

They make the argument that if economic growth picks up in the second half of 2011, then home prices should stabilize early next year.

As homebuyers become more confident, many who are sitting on the sidelines will begin to enter the market and prices will start to increase. But we should not expect a rapid rebound in home prices.

Very large inventories of foreclosed properties must be liquidated and absorbed before the healthy functioning of housing markets is restored.

Fiserv Home Price Insights, November 9, 2011



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