Most analysts believe that the correction in house prices is far from complete; for example, according to the February Blue Chip consensus (which is the average of about 50 forecasts by private-sector economists), the 20-city version of the S&P Case-Shiller index will fall a further 14 percent in 2009.
Housing starts in January plunged to 477,000 (at a seasonally adjusted annual rate), an all-time low since the U.S. Census Bureau started tabulating them in 1959. Although they rebounded somewhat, to 583,000 in February, that number contrasts with the more than 2 million starts at the height of the boom in 2005. Even though the construction of new homes has been at an extremely low rate for more than a year, no progress has been made toward reducing the excess supply of vacant units. ...
After rising for much of last year, mortgage rates—both for conforming loans and for larger, or jumbo, loans—fell late last year, and they have remained low thus far in 2009. Lower mortgage rates have spurred applications for refinancing; nevertheless, the number of applications for loans to finance purchases of homes has fallen this year.
Sunday, March 22, 2009
Vacant homes graph
From the Congressional Budget Office: