Home Prices Haven't Hit Bottom, Economists Say

Washington, DC, March 4, 2008--Home prices still have a way to decline and could fall 20 percent from their peak.

That was the conclusion of a panel of economists at a meeting of the National Association for Business Economics Monday. They said inventories are still way too high, and, in fact, some homebuilders are building too many homes. They also noted that consumers aren't buying because they believe prices will continue to fall.

The decline will erase $4 trillion in household wealth, the economists said.

"We're awash in inventories," said Mark Zandi, chief economist for Moody's Economy.com.

"No credit is flowing, making it difficult for home sales to pick up," said Zandi.

Home prices declined 8.9 percent last year, according to the Case-Shiller home price index.

The sales decline is happening virtually everywhere, and only a couple of areas are still seeing price increases.

Florida, California, Arizona and Nevada are leading the decline.

Zandi said the White House may be forced to rethink its position that no tax money will be used to aid the housing market.