Home prices could fall by as much as 10 percent this year, and the labor market is showing signs of wavering, even with Federal Reserve efforts to stabilize the economy, said Chris Low, chief economist at FTN Financial in New York.
“You have the Fed doing everything they can to keep the economy running,” Low said on Bloomberg’s Television’s “Surveillance Midday” with Tom Keene today.
Home prices will fall “at least 5 percent” but there’s a greater “likelihood of 10 percent,” he said.
Data on consumer confidence, as measured by the weekly Bloomberg Consumer Comfort Index, suggest many consumers believe “we are still in a recession,” Low said. The index dropped to minus 46.9 in the period to May 8, the weakest reading since March.