Deutsche Bank: Housing Still Has 10% To Fall

This week Moody’s came out and said that this is it, housing has bottomed!

But, Deutsche Bank has other ideas.

HousingWire: Today, Deutsche Bank researchers say these predictions will likely become a reality, with the total peak-to-trough decline of US home prices hitting nearly 40%. In the current outlook, they say home prices will drop a further 10 to 12% from current levels.

The results are part of a nationwide projection that represents a weighted average across 100 individual metropolitan statistical areas (MSAs).

The projections come from the securitization arm of the investment bank and is the first forecast expanded to include more factors that impact home prices overall as well as a variety of ranges (month-to-month, peak-to-trough).

“A change in market psychology (which can both cause, and be caused by, recent home price increases), some signs of labour market stabilisation and various government programs aimed at easing the housing crisis have all been constructive for housing,” write the researchers. “These changes may have helped abate the freefall in prices we saw in early 2009, and the “overcorrection” we started to see in home prices.”

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