The U.S. housing market is still in recession, with prices all over the country declining and testing 2009 trough levels, according to the latest S&P/Case-Shiller Home Price Index.
The January Case-Shiller report released today showed that in 11 of the 20 cities surveyed, prices dropped below lows forged in 2009 following the bursting of a real estate bubble that peaked in 2006. Another month of declines adds to a trend many analysts suggest will continue.
Last month, Yale University’s Prof. Robert Shiller said the housing market is “vulnerable” in an assessment he conceded might be overly optimistic. He argued that the market’s strength since bouncing off its 2009 lows was largely linked to government tax credits aimed at creating demand for homes. Since they expired last summer, price declines have resumed.
The U.S. housing market is at the center of a credit crisis that sent the U.S. economy into perhaps its worst slowdown since the 1930s. Real estate remains a crucial element to a lasting recovery, which is why some analysts fret that renewed declines in prices are a bad omen for the whole economy.
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