by Bill McBride on 3/30/2010 06:03:00 PM
Tuesday, March 30, 2010
One of the key questions is: Will house prices fall as the government support for housing eases? From CNBC: Housing Prices May Be Heading for a Double Dip
Anyone thinking housing prices have reached a bottom had better do some recalculating. Despite Tuesday's Case Schiller report showing smaller declines in January, housing prices may already be in another free fall.Few people use the FHFA index anymore, but I do think prices will fall further in many areas. And I think the key housing price indexes, Case-Shiller and First American CoreLogic, have not bottomed yet - although it is possible.
Newly revised numbers are pointing to the decline.
The Federal Housing Finance Agency's (FHFA) adjusted figures show a housing price decline of 2 percent in December and 0.6 percent decline in January—reversing some regional price increases in 2009.
And more pricing dips are predicted.
Right now the Case-Shiller composite 10 index is 4.4% above the bottom of May 2009 (seasonally adjusted), and CoreLogic's index is 3.5% above the bottom of March 2009 (NSA), so it will not take much of a decline to see new post-bubble lows.
Last year I listed some of the temporary Government housing support programs (as opposed to permanent programs like tax breaks). This included:
Marshall & Ilsley Corporation (M&I) today announced it has extended its foreclosure moratorium an additional 90 days – through June 30, 2010. The initial moratorium was announced on December 18, 2008, as part of M&I's Homeowner Assistance Program. The moratorium is on all owner-occupied residential loans for customers who agree to work in good faith to reach a successful repayment agreement. The moratorium applies to applicable loans in all M&I markets.And other lenders are clearly not been aggresive in foreclosing.
So although some key programs are ending (MBS purchase program and housing tax credit), there are still a number of temporary programs providing support for the housing market.
Posted by Bill McBride on 3/30/2010 06:03:00 PM