Fed to Print $600 Billion More as Home Prices in U.S. Declined 1.6% From Year Earlier

January 26, 2011 05:18

Federal Reserve to print more money as a result. Residential real-estate prices dropped in November by the most in a year, signaling housing has yet to join the U.S. rebound.

By Shobhana Chandra at Bloomberg.com


Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’ equity and construction. The lack of a sustained housing rebound and unemployment above 9 percent are among reasons the Federal Reserve may announce this week it’ll complete a second round of stimulus that will pump $600 billion into the economy by June.

Sixteen of the 20 cities in the index showed a year-over- year decline, led by a 7.9 percent drop in Atlanta. In November, prices in nine markets dropped to fresh lows from their 2006, 2007 peaks.

“With these numbers more analysts will be calling for a double-dip in home prices,” David Blitzer, chairman of the index committee at S&P, said in a statement. A double-dip would be reached when the 20-city index sets a new post-peak low, which may happen in the first half of this year, said Blitzer.


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