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Tuesday, February 22, 2011

CNN: Home Prices could drop additional 20%

This prediction is made by Rober Shiller of the Case-Shiller index.
And things may get a lot worse, said Robert Shiller, a Yale economist and half of the Case-Shiller team, in a web conference after the report's release.
"There's a substantial risk of home prices falling another 15%, 20% or 25% more," he said.
Shiller cited a few reasons for his bearish stance. The government is expected to reduce the presence of Fannie Mae and Freddie Mac in the housing market. These agencies currently provide loan guarantees for about two-thirds of mortgages. There's also talk of possibly ending the mortgage interest tax deduction for many homeowners. Meanwhile, the weak economic recovery may be threatened by higher oil prices as a result of turmoil in the Mideast.
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