U.S. Housing Expected to Bottom in March

Posted by Chip Armstrong on Tuesday, February 7th, 2012 at 8:23am.

This March, US home prices are expected to reach the bottom of the market.

Recent studies are predicting that both the CoreLogic Index and the Case-Shiller Index will valley in March. However, because the data these indices use is from several months prior, the March prediction actually corresponds to current conditions.

These predictions are based on the price-to-rent ratio as well as the real price of homes, or home prices after being adjusted for inflation. After balllooning in the mid-2000s, both these factors have now returned to normal historical levels. As well, with listing inventory on the decline and with policies created to ease the pressure from distressed sales, the price free-fall will stop.

Although this is good news, according to Calculated Risk, prices do tend to move sideways for several years after a bust, so immediate rises in house prices are unlikely.

While these predictions cover all US housing prices, it will likely take areas with many foreclosures several months before their market bottoms.

[Calculated Risk]

Price-to-Rent ratio (source: Calculated Risk)

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1 Response to "U.S. Housing Expected to Bottom in March"

Barb wrote: Excellent news. There was also an article in todays Post stating "Indes shows S. Fla. housing gains!

Posted on Tuesday, February 7th, 2012 at 1:52pm.

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