Economists, builders and mortgage analysts are predicting the weakened U.S. economy will depress housing prices for years, restraining consumer spending, pushing more homeowners into foreclosure and clouding prospects for a sustained recovery, The Wall Street Journal reports. Home prices are expected to drop 2.5% this year and rise just 1.1% annually through 2015, according to a recent survey of more than 100 economists. Prices have already fallen 31.6% from their 2005 peak, as measured by the Standard & Poor’s Case-Shiller 20-city index. If the economists’ forecast is accurate, it means housing faces a lost decade, in which home prices recover just a fraction of what was lost between 2005 and 2015, leaving millions of homeowners with little, if any, equity in their homes. The survey was conducted for MacroMarkets, a financial technology company cofounded by Yale University economist Robert Shiller. Read the article here (Subscription is required).
Economy expected to hamper housing market through 2015
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