“Consumer attitudes have gotten a lot more negative about long-term commitment,” said Standard and Poors’ David Blitzer, after reporting home prices through September had fallen a deeper-than-expected 3.9 percent compared to the third quarter of 2010.
“They dropped to new lows. This takes them below the point we saw in 2009, where briefly we all thought this thing was about to turn around.”
And that’s the problem.
Every time we think things are turning around in the housing market, we get hit with some new problem, like last year’s so-called “robo-signing” foreclosure paperwork scandal, which managed to stall the cleansing of distress in the market for over a year. Now that foreclosures are ramping up again, prices are coming down again.
All this could push home ownership down to levels not seen at least since before the Census began tracking this data in 1963. Home ownership soared to 70 percent in 2005, but it could fall to 62 percent by 2015, according to the number crunchers at John Burns Real Estate Consulting.
They suggest that the effect of foreclosures drops home ownership 5.6 percent, and cyclical trends, like poor consumer confidence, tightening mortgage credit and the weak economy drop it 3 percent. Positive demographic trends would only offset that by 0.7 percent.