Indicators Suggest More Housing Weakness

A new report from the Federal Housing Financing Agency indicated that home prices were flat in September compared to August.

Some analysts saw this and other factors as a sign that home prices are likely to fall again.

Predicting a new 10 percent decline, John Silvia, chief economist at Wells Fargo, said, “There is no clear, easy way out for housing. Contrary to my hopes, housing prices and the housing market in general will weaken again.”

Meanwhile, the Federal Reserve continues to predict that unemployment will remain above 9 percent through 2010. Minutes of its most recent meeting show that Fed officials are unwilling to raise the overnight federal funds rate from its current level of zero for fear of pushing up mortgage rates and adding to the malaise.

Source: The New York Times, David Streitfeld, Edmund L. Andrews and Javier C. Hernandez (11/24/2009)