U.S. home prices will fall 5 percent to 7 percent more before a reaching a bottom in late 2011, said Stan Humphries, chief economist of Zillow Inc., a provider of housing data.
The backlog of homes in foreclosure is swelling the inventory of properties for sale, making buyers hesitant to enter the market, Humphries said in an interview today on Bloomberg Television. The inventory will be boosted further by properties that have yet to be foreclosed on, he said.
“Supply is just overwhelming,” Humphries said. “We are tripping over houses in this country right now.”
The S&P/Case-Shiller index and the National Association of Realtors show that U.S. home prices found a floor last year. Home prices in 20 U.S. cities fell almost 32 percent from their 2006 peak before reaching a low in May 2009, according to the S&P/Case-Shiller index.
Buyers are wary of making home purchases because they fear that prices will fall further, Humphries said.