Home prices have shown few signs of any turnaround, and a new report sees the downward slide continuing.That sucking sound you hear is the price of your home going down the toilet. Look for more foreclosures as people owe more than the home is worth and will be unable to sell the home to get out of rising ARM rates.
On Tuesday, Standard and Poor's said its nationwide S&P/Case-Shiller Home Price Index fell 3.2 percent in the second quarter, compared with a year ago. For the three months ended June 30, prices dropped 0.9 percent from the first quarter.
Major housing markets showed worse declines. The Case-Shiller index covering 20 top metro areas for the month of June fell 3.5 percent, and the 10-city index dropped 4.1 percent year-over-year.
"The pullback in the U.S. residential real estate market is showing no signs of slowing down," Robert J. Shiller, Chief Economist at MacroMarkets LLC said in a statement. "The year-over-year decline reported in the 2nd quarter of 2007 for the National Home Price Index is the lowest point in its reported history, which dates back to January 1987."
Banks will be bailed out by the government when its revealed that the subprime mess has severely damaged their operations, but the homeowner who took out the subprime mortgage will just get ruined credit and financial hardship.