NEW YORK | Mon Oct 20 Air Max 2010, 2008 2:50pm EDT NEW YORK (Reuters) - U.S. home prices will fall another 10 percent before they begin to show signs of stabilizing, Fitch Ratings said on Monday.
National home prices have declined a full 22 percent from the peak hit in 2006, the agency said in a note. Fitch has a peak to trough forecast for prices to decline 30 percent. The additional 8 percent decline is equal to another 10 percent decline from current levels www.topsuprasneakers.com, it said. Most of that correction will take place in the next several quarters before prices exhibit stability in 2010, said the agency.
Fitch’s analysis indicates that expected drop will reverse the home price increases seen between 2004 and 2006. "Should economic conditions become much worse than expected, home prices would decline more than Fitch’s projection and price stabilization would be delayed," said Huxley Somerville, group managing director and head of U.S. residential mortgage-backed securities. "Higher mortgage rates and tighter underwriting also will continue to put downward pressure on prices."
Government measures, including the U.S. Treasury’s Troubled Asset Relief Program and expanded mandates for housing agencies Fannie Mae, Freddie Mac and the Federal Housing Administration to boost loan purchases and originations, may improve liquidity in the housing markets, said Suzanne Mistretta, senior director at Fitch. That could have a positive impact on prices, she said.
Fitch’s analysis indicates that the 29 percent rise in home prices in the period between 2004 and 2006 has now been reversed. The spike was the largest price growth ever recorded in the U.S. Prices have now returned to early 2004 levels and need to return to levels seen in 2003 before the pace of decline will moderate.
(Reporting by Ciara Linnane; Editing by Theodore d’Afflisio)
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