The Double Dip's Official: Home Prices Fall to New Low

National home prices are officially on the hunt for a new bottom. After beginning to decline again this summer, once the home buyer credit expired, home prices hit a new post-bubble low in April, according to housing industry consulting firm Clear Capital. It reports that national home prices now sit 0.7% below their March 2009 low. Over the past nine months, they're down 11.5%.

Here's the chart from Clear Capital showing the descent of national home prices:

clear capital home prices 2011-04.png

This is ugly, to be sure. Nationally, home prices declined 5.0% over the past year. All four regions of the U.S. saw their prices decline, year-over-year:

  • Midwest: -6.3%
  • West: -6.2%
  • South: -5.2%
  • Northeast: -1.6%

Clear Capital blames the rapid decline in prices on the saturation of bank-owned foreclosures. They climbed in April. Of course, home buying demand has also remained weak over the past nine months. So as inventory rises and demand sulks, prices are dropping.

Now, we can definitely call this a double dip, but it's important to remember that it's a self-imposed double dip. The home buyer credit essentially prolonged the housing market's agony. Instead of allowing the market to hit its inevitable bottom, the program propped up home buyer demand for a period of time. But once that support was withdrawn, the market continued back down its inevitable path.

Perhaps without the credit, the U.S. housing market would have already hit its bottom and would now be in the process of a slow recovery. But now, as other parts of the economy improve, housing is hurting again. That makes the broader recovery even more difficult.

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In