Home Prices in U.S. Probably Kept Falling as Housing Absent From Recovery
Bloomberg | May 31
U.S. home prices probably slumped in March by the most in 16 months, indicating residential real estate will keep weighing on the expansion, economists said before a report today… “Weak demand and a deluge of discounted sales of distressed properties have weighed significantly on prices,” said Aaron Smith, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “It’s hard to be enthusiastic about the economy’s prospects as long as house prices are falling.” A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects.

Housing Index Is Expected to Show a New Low in Prices
The New York Times | May 30
Housing is locked in a downward spiral, industry analysts say, not only because so many people are blocked from the market — being unemployed, in foreclosure or trapped in homes that are worth less than the mortgage — but because even those who are solvent are opting out. “The emotional scars left by the collapse are changing the American psyche,” said Pete Flint, chief executive of the housing Web site Trulia. “There was a time when owning a home was a symbol you had made it. Now it’s O.K. not to own.”
To Shore Up the Recovery, Help Housing
Moody’s Analytics | May 25
The gloom in the housing and mortgagemarkets notwithstanding, there are reasons to be optimistic that housing’s long slide will come to an end soon. While a mountain of distressed property remains to be sold, investor demand appears strong. Prices have fallen enough to allow investors to profitably rent out these homes until the market recovers. Rental vacancy rates have fallen meaningfully over thepast year, suggesting that new construction is slow enough to let builders work down the still-considerable number of excess vacant homes.
Federal government guilty of hurting housing market by guaranteeing mortgages, inflating home values
NY Daily News | May 31
bIt seems logical to think that government should not be underwriting everyone’s mortgages, but since the financial meltdown, things have actually gotten worse, not better. With banks nervous about lending and with tens of millions of homeowners underwater, more than 90% of all mortgages are being guaranteed by the government – and that means by you and me. Further, in the past Fannie and Freddie were only quasi-government agencies. But now that we have bailed them out they are actually part of the government – which means that we, the taxpayers, are financing more than 90% of all mortgages and covering the losses of anyone who is underwater. With the government guaranteeing mortgages, home values have become artificially inflated. You may think home prices are attractive, but if the government stopped guaranteeing 90% of all mortgages, they would be lower.
US has 14.3m vacant year-round homes and home ownership has dropped to 1998 levels
Finfacts | May 31
Pending home sales fell in April with regional variations following increases in February and March, with unusual weather and economic softness adding to ongoing problems that are hobbling a recovery, according to the National Association of Realtors (NAR). The Pending Home Sales Index, a forward-looking indicator based on contract signings with completion expected within 2 months of signing, dropped 11.6% to 81.9 in April from a downwardly revised 92.6 in March. The index is 26.5% below a cyclical peak of 111.5 in April 2010 when buyers were rushing to beat the contract deadline for the home buyer tax credit.
Investors optimistic about housing market, survey says
The Arizona Republic | May 25
Investors in the housing market remain bullish about their chances for turning a profit, according to results of a survey issued today by online real-estate firm Move Inc., based in Campbell, Calif. Among their reasons to be optimistic were weak competition from traditional homebuyers, strong demand for single-family rental properties and the relatively low cost of buying and fixing up homes. However, the survey’s results also point to some perceived weak spots in the market, including stagnant resale prices and difficulty obtaining purchase loans.