The downward pressure on home prices is expected to continue through this year and few experts expect prices to increase substantially for the next three years.
As long as unemployment and underemployment is high, there’s not going to be much demand for buying homes.
Record low mortgage interest rates have helped sales over the past couple of months.
“Fixed mortgage rates bottomed out in January and February of this year which is helping spur the housing market,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. “For instance, pending existing home sales rose in January to its strongest pace since April 2010 and sales figures for December saw upward revisions.”
Housing data released this week showed home prices fell 4 percent year-over-year to their lowest mark since 2002. The drop follows a 3.9 percent decline in the S&P/Case-Shiller index the previous month, casting a troubling shadow over an otherwise brightening economic recovery.