Tess Vigeland: Remember how the housing market hit bottom? Yeah, never mind.
Fresh numbers out today show that in the first part of this year, U.S. home prices fell to their lowest point since the recession began. And they fell despite the federal government’s best efforts to juice the market. Or, maybe, because of them.
Marketplace’s Jeff Horwich reports.
Jeff Horwich: The Case-Shiller Home Price Index is the benchmark among benchmark numbers in real estate. And today, it quantified that gut-dropping feeling many homeowners already have.
Maureen Maitland: We have in fact confirmed that we’re in a double-dip in terms of home prices.
Maureen Maitland is vice president of indices at Standard & Poors. Here’s how that double-dip played out.
Maitland: Home prices fell between 2006 and 2009, and we thought they’d hit a bottom in 2009. They bounced back temporarily. They have since fallen again, and they have now fallen to a level that’s even lower than what happened in 2009.
And it’s happening across the country. The biggest drop, year-over-year, was in Minneapolis, where Thomas Musil is a professor of real estate at the University of St. Thomas. He says it’s now clear the brief rise in home prices was a fleeting effect of government tax credits.
Thomas Musil: This created a somewhat abnormal market. We’re seeing the effects of the motivations or incentives or subsidies for people to buy that normally wouldn’t have bought in that period.
Musil says the homebuyers’ credits helped sell a lot of homes that were clogging the market. But mortgage lenders remain cautious. And the market is still full of foreclosed homes that drag all prices down. Devona Brazier and her husband would like to sell their home in Akron, Ohio — if they can figure out when to get off the ride.
Devona Brazier: There’s no way we’re going to even break even, even if we sold our house this year. But we’re afraid if it gets worse, we’re going to lose even more.
The result is a kind of paralysis that affects the rest of the economy. The Braziers want to move from Ohio to Texas, where there are better job prospects — but not if they can’t sell that house.
I’m Jeff Horwich for Marketplace.
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