House Values Continue to Decline – Where is the Bottom?
Posted on | July 20, 2009 | No Comments
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House values in most major cities continue to decline. In 16 of the 20 cities represented in the Case-Shiller index, house values declined. The four cities that saw a meager monthly increase were Denver, Dallas, Washington and Cleveland. Year over year, every single housing market is down. From the peak in July of 2006, the housing market is off 33.1% and was off 1.0% in April, which is the latest data.
The Case-Shiller Index is off 18.1% from last year which is very close to the worst year-over-year performance since the housing bubble burst. There is a great article on Calculated Risk about the April Case-Shiller data located here. I have been saying for months that the housing market does not seem to be getting better, but the media likes to report differently. The President, his staff and almost all CNBC anchors are saying that the housing market is bottoming. Um, where?
The only way we will see the housing market bottom is if we see a great amount of job creation and the new housing supply falls below nine months. Neither of these have happened yet so there are still several months of house value declines to come. Average mortgage rates are likely to head higher with the 10 year treasury rate yield so maybe that will help to flush the bottom out of the housing market. If we see higher rates we will definitely see lower home prices. Maybe this is just what we need to finally see the bottom of house values.
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