Moody’s chief economist doubtful over dramatic economic recovery

Dropping home prices will probably thwart a dramatic economic recovery in the U.S., according to John Lonski, Moody’s Investors Service’s chief economist. In a statement yesterday, Lonski voiced doubts over whether the Case-Shiller index of home prices will continue to rise in major metropolitan areas, even though its shown three consecutive months of improvements. “I’m just not convinced that we’ve formed a lasting bottom for residential real estate prices,” Lonski said. Like Lonski, many financial experts have expressed concern over whether home prices will hold after the first-time homebuyer tax credit program ends.