NEW YORK ( TheStreet) - Home prices are expected to drop 1.6% in the fourth quarter of 2011, and fall another 3.2% in the first quarter of 2012, according to Clear Capital's home data index.
Current year-over-year home prices remain 3.8% lower, the report showed, though September did show gains, particularly in the Midwest region of the country where housing prices gained 7.2% last month.
Even so, Clear Capital projected that national home prices at the end of the first quarter of 2012 will be comparable with those at the end of the first quarter of 2011, which were the lowest since the housing market downturn began."The housing market has yet to demonstrate the fundamentals necessary to overcome a seasonal slowdown over the next six months, which drives our projected 3.2% drop in national home prices through the first quarter of 2012," said Alex Villacorta, director of research and analytics at Clear Capital.
"The normally positive market forces of record low mortgage rates and near record lows in home prices are being offset by high unemployment rates and general consumer pessimism about the economic future," Villacorta added. "Until we experience a more stable economic environment, I expect home prices to remain relatively flat or slightly down for the foreseeable future."