U.S. housing recovery depends on foreclosure processing, mortgage rates

Miami /
Apr.April 12, 2012 02:15 PM

Home prices nationwide are finally bottoming out, though foreclosures threaten the market’s strength, Reuters reported. Reuters’ 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
(Illustration by The Real Deal with Getty Images)
South Florida’s June resi sales drop by double digits
South Florida’s June resi sales drop by double digits
South Florida homes
South Florida home sales plunge in May, as prices continue rising
South Florida home sales plunge in May, as prices continue rising
2445 South Ocean Boulevard (Ed Butera/IBI Designs, iStock)
Hedge funder drops record $35M for oceanfront Highland Beach estate
Hedge funder drops record $35M for oceanfront Highland Beach estate
Patti and Allan Herbert with 4845 Southwest 78th Street (Credit: University of Miami and Redfin)
After selling their Richmond Hotel in Miami Beach, this couple bought a new house
After selling their Richmond Hotel in Miami Beach, this couple bought a new house
Zillow CEO Rich Barton (Credit: iStock)
Zillow Offers launches in South Florida
Zillow Offers launches in South Florida
(Credit: iStock)
Rough quarter: Resi sales fall in Broward, increase slightly in Miami-Dade
Rough quarter: Resi sales fall in Broward, increase slightly in Miami-Dade
Miami skyline (Credit: iStock)
Bringing some sunshine to South Florida’s opaque resi report outlook
Bringing some sunshine to South Florida’s opaque resi report outlook
June residential sales plummet (Credit: iStock)
Resi sales plummet across South Florida’s three counties in June
Resi sales plummet across South Florida’s three counties in June
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...