Housing prices close to bottoming, keeping mortgage rates low is key: Reuters

TRD New York /
Apr.April 12, 2012 12:00 PM

Home prices nationwide are finally bottoming out, though foreclosures threaten the market’s strength, Reuters reported.┬áReuters’ survey of 24 economists forecast the Case-Shiller Home Price Index rising 2 percent next year, up 0.5 percent from the 1.5 percent growth projected in the news agency’s January survey.

Traditionally, housing leads the American economy out of a dip, Reuters said. However, this recession has proved different, likely because home prices have “an oversized reach,” in the current economy, the survey shows. Home prices fallen approximately 32 percent from their peak, at the end of 2005, Reuters said. And an estimated 11 million Americans are underwater on their mortgages.

“We are expecting a gradual improvement, but if we get a big wave of new foreclosures coming to the market, price declines could be even greater,” Yelena Shulyatyeva, an economist at BNP Paribas in New York, who was consulted in the survey, told Reuters. The economists found that Americans’ expectation that more foreclosed homes would still be flooding the market was causing them to delay purchasing a home.

The economists also said that the purchase of additional mortgage-backed securities by the government might help keep mortgage rates at their historic lows, which could be key to spurring a housing recovery. [Reuters]


Related Articles

arrow_forward_ios
(Credit: iStock)

Home-price gains hit lowest rate in a year

New York, LA, Miami home prices continue to rise

New York, LA, Miami home prices continue to rise

New York home prices up 6% in the last 12 months

New York home prices up 6% in the last 12 months

Home prices rising at fastest rate in years: Case-Shiller

Home prices rising at fastest rate in years: Case-Shiller

NYC home prices picked up steam in March: Case-Shiller

NYC home prices picked up steam in March: Case-Shiller

Placeholder image

US home prices continue to rise in November, though sales volume is slowing

New York lags far behind rest of US in latest Case-Shiller index

New York lags far behind rest of US in latest Case-Shiller index

National home prices keep rising

National home prices keep rising

arrow_forward_ios