Could there be a double-dip in housing?
TEXT OF STORY
JEREMY HOBSON: Well let’s remember this fiscal nightmare began when the housing market went bust. And according to the latest numbers, home prices are still falling. The buying may slow even further now, because mortgage rates are up almost a percent since late fall.
Marketplace’s Mitchell Hartman reports now on whether we’re in for a double dip — in the housing market.
Mitchell Hartman: Home prices were down more than 5 percent in November compared to the previous year, according to research firm CoreLogic. That’s the fourth monthly decline.
A tax credit for first-time homebuyers helped jumpstart sales and push prices up last year, but only temporarily, says Sam Khater of CoreLogic.
Sam Khater: It will be a number of years before the market recovers.
Most analysts expect home prices to fall at least 5 percent more, dipping below the lows already hit in the recession.
Khater: And that’s primarily because there’s a large supply-and-demand imbalance: way too many homes on the market. In addition, a large pipeline of defaults.
And all those cut-rate foreclosures are dragging down home prices for everyone, says David Blitzer of Standard & Poors.
David Blitzer: Not only are there a lot of them pending, but every time we think we’ve worked through the last legal issue or signature issue for foreclosures, there’s another one.
Some banks stopped foreclosures temporarily because of those legal issues. But home seizures are like to pick up again this year.
I’m Mitchell Hartman for Marketplace.
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