| NEW YORK
NEW YORK Jan 22 The U.S. housing market slump
is nowhere near over and home prices will probably keep falling
well into next year, according to one of the property market's
most well known economists.
Robert Shiller, professor of economics at Yale University
and co-developer of Standard and Poor's S&P/Case-Shiller Home
Price Indices, told Reuters that while he does not give
quantitative forecasts, the futures market indicates the
downward trend in home prices is far from over.
"The futures market, based on the indices at the Chicago
Mercantile Exchange, predicts that home prices will continue to
decline well into 2010 and could go down another 10-15
percent," he said.
"The forecast could possibly be right and indicates things
could get worse," he said.
The market is only midway through the crisis if the
forecast is right, he said.
"While I do not want to be bearish, there is a possibility
that the decline in home prices may persist even longer than
that because of the drop in confidence that we have seen, which
is really historic," he said.
Prices of U.S. single-family homes plunged a record 18.0
percent in October from a year earlier, Standard & Poor's said
last month, with the drop in prices accelerating as
The Standard and Poor's S&P/Case-Shiller Home Price Index
for 20 metropolitan areas fell 2.2 percent in October from
September, accelerating for the fourth straight month.
S&P said its composite index of 10 metropolitan areas
declined 2.1 percent in October from September for a 19.1
percent year-over-year drop, also a record for the index which
dates back to 1988.
The U.S. housing market is in the worst downturn since the
Great Depression as a huge supply of unsold homes, tighter
lending standards, and record mortgage foreclosures push down
Economists believe the housing market will not begin to
recover until home prices fall far enough to revive demand.
One glimmer of home for the hard-hit U.S. housing market
has been the recent trend lower in mortgage rates.
"If you have lower mortgage rates that definitely can help
support home prices," Shiller said.
"But, if you look at the recent boom and bust in housing,
it is not explained by the mortgage rate," he said.