No Relief for Yet Housing Prices...

The S&P/Case-Shiller Index of Home Values in 20 cities fell -1.6% from November 2009, the biggest 12-month decrease since December 2009, according to the median forecast of 26 economists surveyed by Bloomberg News.

Mounting foreclosures will probably throw more properties on the market this year, further depressing prices, homeowners’s equity and construction.

The lack of a sustained housing rebound and unemployment above 9% are among reasons the Federal Reserve may refrain from raising interest rates and complete a 2nd round of stimulus that could pump $600 billion into the economy by June. 

“The large overhang of unsold houses will weigh on prices,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Housing is lagging the economic recovery. It is one factor encouraging the Fed to remain on the sidelines.”