Those looking to buy a house shouldn't fret. Their day is coming, says Mark Zandi, chief economist at Moody's Analytics. Many prospective home buyers are waiting until house prices fall even more before buying.
Nationwide, home prices will decline by 5 percent this year, and apartment rents are on track to rise by about 5 percent.
Home prices should stabilize in 2012, but rents will continue to rise.
"The still high price-to-rent ratio means that home buyers shouldn’t be in a rush to buy a home," Zandi tells The New York Times.
"But owning is quickly looking more attractive, and it won’t be long before owning is once again more financially attractive than renting."
|Home prices to fall even more.
(Getty Images photo)
Distressed properties — foreclosures and short sales — are weighing down home prices, while prices for nondistressed homes are "holding up well and may very well have hit bottom."
"And timing the precise bottom of house prices is an intrepid affair, and may not the best strategy if the homeowner plans to live in their home for more than a couple of years, as most homeowners do," Zandi says.
The housing market, which helped throw the economy into the worst recession since the Great Depression, is still very weak, Federal Reserve officials says.
"The housing market is also holding back the recovery. The foreclosure rate remains very high, and many homeowners who have avoided foreclosure find themselves 'underwater,' meaning their mortgage debt exceeds the value of their homes," Fed Chairman Ben Bernanke said recently, according to the AFP.
"In some areas, for example, high foreclosure rates have produced significant numbers of vacant properties, depressing surrounding home prices, attracting crime, and creating financial burdens for local governments."
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