Housing prices will continue to tank and will dip by another 30 percent before the market rebounds, says Oppenheimer analyst Meredith Whitney.
"There's one obvious area where the bad news isn't all out yet, and that's with home prices ... Home prices are going to fall much more than people expect," she told CNBC.
Home prices also haven't hit the bottom yet and will face more bad news, Whitney predicts.
In fact, the value of existing U.S. single-family homes in metro areas fell 7.6 percent in the second quarter compared with the same period in 2007. Home prices in the West fell the most, down 17.4 percent.
"I think it's going to be well worse than 33 percent, and here's why," she says.
"If you look at the futures market, it's indicating a range right around between 2002-2003 levels, when home ownership rates were actually higher. But fewer people can qualify for a mortgage because you've got to put 20 percent down, and that's a lot of money for people."
Furthermore, she says, "Then you've got to find a bank to lend to you, because, Countrywide's not lending to you."
According to Whitney, banks will not be eager to fund any loans in the near term until the credit crisis resolves itself.
While banks are finding more capital, they are holding on to it, she says. Instead of allocating their new capital for loans, they are fixing their depleted balance sheets.
When you add to that the fact that fewer consumers are qualifying for mortgages, Whitney says consumers will continue to see less available credit.
Banks have been far more cautious in originating loans this year even though the Federal Reserve slashed interest rates to 2 percent. While banks originated $900 billion in loans last year, but just $100 billion so far in 2008, Whitney notes.
She says banks are part of a trend that she called "weak hands to strong hands."
"If you don't need capital, you can get capital. If you need capital, you're not going to get capital," she says.
When banks feel they can make loans again, both the housing and banking industries will start to see a revival, she predicts.
© 2017 Newsmax. All rights reserved.