Buying a home wouldn't make much sense if house prices were likely to decline further; no one wants to catch a falling knife.
Sentiment: NEGATIVE
It is hard to be enthusiastic about the economy's prospects when house prices are falling: Households spend less, small business owners can't use homes as collateral for loans and local governments are forced to cut jobs and programs as property-tax revenue disappears.
The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses.
A home is a home, and excess supply leads to prices falling.
It's easy to underestimate the real cost of home ownership.
Frankly, people buying a home to let should not be squeezing out families who can't afford a home to buy.
It's cheaper to buy a house and finance it than it is to rent in many markets.
And so the danger for the housing industry is if we see interest rates rise.
Americans now know that housing prices can go down and they can go down by 10, 20, 30, and in some cases, 40 or 50 percent. We know they can go down. But five years ago, we thought they could only go up.
That is - the reason for that is that home prices are only going to go up. Now, they've never gone down nationwide in our - since we've been keeping track of this.
There are certain people who seem doomed to buy certain houses. The house expects them. It waits for them.