Housing: Shock and Aftershock

Aftershock: Housing in the Wake of the Mortgage Meltdown



Comment: This study will set you back $ 3,995 big ones! But here is a synopsis:

No housing market upturn until 2010 - Moody's Economy.com

The US housing market is awash in unsold inventory and with home prices already down more than 5 pct from two years ago, the sector in the midst of the worst downturn since 1945, with measurable improvement not expected until 2010, said Moody's Economy.com.

In its study, 'Aftershock: Housing in the Wake of the Mortgage Meltdown', Moody's (nyse: MCO - news - people ) Economy.com said US housing prices should reach a trough in early 2009, by which time they will have fallen 12 pct nationally according to data gathered from 381 US metropolitan areas.

'The housing market is unravelling. The current housing recession will ultimately be severe enough to be characterised as a housing crash,' said Mark Zandi Moody's Economy.com chief economist.

The housing market will only find a bottom when significant progress is made in working off this inventory , which will require further severe cuts in new construction, reducing supply, and much lower house prices, which will ultimately restore affordability, and demand, the release said.

More:

House prices seen falling 30 pct

Excerpt:

House prices are forecast to fall 13 percent from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15 percent, the report said.

Punta Gorda, Florida, and Stockton, California, are the hardest hit markets in the U.S., with price declines from peak-to-trough forecast at 35.3 percent and 31.6 percent, respectively.

"This is the most severe housing recession since the post-World War II period," Zandi told Reuters.