Deutsche Bank Says Home Prices To Keep Falling

New York, NY, Sept. 15, 2009--Home prices won't reach bottom until the end of next year’s second quarter, according to Deutsche Bank AG.

The firm says prices will fall another 10.5 percent and the total decline will be 38 percent measured from the estimated market peak in the fourth quarter of 2005,

“Serious delinquencies are still rising rapidly in mortgages, unemployment reached a new cycle high, inventory in most parts of the country is elevated, and in some areas affordability is backtracking,” the bank analysts wrote.

Deutsche Bank said the current-to-trough decline in June would be 14 percent and the total drop would be 42 percent. Home-price gains and a slowing of the unemployment rate account for an improved outlook, the analysts wrote.

Foreclosure moratoriums may have been enough to “turn momentum and confidence,” although such government policies “merely delay the inevitable,” the analysts wrote.