Mortgage Rate News

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U.S. home prices are expected to continue to fall through this year, according to Moody’s and Fiserv. There have been recent signs that the housing market is getting ready to move forward, showing improvement, but there are still likely to be plenty of setbacks along the way. As evidenced by January new home sales data, it is clear that things are far from resolved in terms of housing.

CNN Money reports on the latest news related to predictions about U.S. home prices:

Most of the projected home price decline will occur during the usually slow summer months of 2010. After that, prices should begin to stabilize, according to Fiserv, and stay almost flat through fall of 2011.

The main reason for continued decline, according to Mark Zandi, economist and co-founder of Economy.com, is foreclosures — the same thing that’s plagued markets for the past three years.

“Foreclosure sales will pick up this spring as mortgage servicers figure out who can qualify for a modification and who can’t,” said Zandi.

With persistent problems in the jobs market, and continued worries about consumer spending and confidence, it will be difficult for the housing market to make solid headway, and the housing market is considered an important part of the U.S. economy.

Indeed, this news reiterates the statements from Fed Chair Ben Bernanke before Congress. He insists that economic recovery will be a slow — and bumpy — road. Indeed, there is a chance that we could see double dip recession if employment doesn’t improve and the housing market can’t be coaxed into recovery. The situation could also deteriorate if commercial real estate proves to be the next real problem in the economy. If defaults pick up in commercial real estate, we could be looking at another real estate crash.

It will be interesting to see what happens going forward, and whether the economy can manage to recover from the last recession.