Home prices could fall 5% this winter, right before the start of the much anticipated spring home buying season, according to Standard & Poor's chief economist David Wyss.
The S&P Case-Shiller house price index fell 2.4% from July through October. Another 5% decline in the 20-city HPI during the winter months could take the index down to the low-point of April 2009. "I think we re-test that bottom," Wyss said in an interview with National Mortgage News.
From July 2006 to April 2009, the 20-city HPI fell 32%. Since then the HPI has rebounded 4.4% thanks to the stimulus provided by the federal homebuyer tax credit.
"We got an artificial bounce because of the tax rebate program and that's coming out of the system," the chief economist said. He also noted that prices during the winter months usually decline. The Case-Shiller HPI is not seasonally adjusted.
Meanwhile, according to Zillow, home values have fallen 26% since their peak in June 2006, worse than the 25.9% decline seen during the Depression years of 1928 through 1933.
