US Housing Market Meltdown Not Over Yet

< /span>The meltdown of the U.S. housing market is not over yet, and 
home prices will soon start trekking downward again as a flood 
of foreclosures looms, a well-known economist said on Wednesday.

Mark Zandi, chief economist at Moody's Economy.com in West 
Chester, Pennsylvania, said in an interview with Reuters home 
prices will resume their decline by early next year as foreclosure 
sales pick up again.

"The housing crash is not over," he said.

The U.S. housing market has suffered the worst downturn since 
the Great Depression, and its impact has rippled through the 
recession-hit economy as well as the rest of the world.

A setback for the hard-hit housing market could portend problems 
for the U.S. economy.

Home prices, as measured by the Standard & Poor's/Case-Shiller 
U.S. National Home Price Index, will trough in the third quarter of 
2010 af ter declining 38 percent, Zandi said.

The index peaked in the second quarter of 2006 and hit a trough in 
the first quarter of 2009, a drop of about 32 percent.

Home prices in many regions have been rising. That is because 
foreclosure sales fell over the summer and fall as mortgage servicers 
have tried to put stressed homeowners into the Home Affordable 
Modification Program and other modification plans, he said.

"This lull in foreclosures sales has resulted in the price gains in the 
past few months," he said.

"Foreclosure sales will increase, and home prices will resume their 
decline by early 2010 as mortgage servicers figure out who will not 
qualify for a modification," he said.

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