Moody's: Nationwide Price Drop Pegged at 36%

The value of homes nationwide will be more than a third lower when prices bottom out late this year, predicts Moody's Economy.com. Already, prices are down 25% and they will fall another 11% before stabilizing late this year, Moody's predicts. And even that prognosis for a bottom late this year is contingent upon the government enacting "strong action" to resuscitate the economy. Moody's says that before the carnage from the housing downturn is over, prices will fall 36% from their peak in 2006. On the bright side, Moody's said that three years into the housing correction, inventories of homes for sale are flattening, prices are coming "back down to earth," and sales are approaching stability. But Moody's Economy.com chief economist Mark Zandi said that so far, "Policymakers have not yet been able to break the downward spiral that has developed among the sinking housing market, job losses, frozen credit markets, and rising foreclosures."