Economists: Flat Home Prices, Growing Economy
Economists meeting at the annual business and economic forecast at the University of Chicago on Tuesday predicted that home prices will remain flat for the next few years, but the economy will grow.
“We will not see a recovery in housing prices in the near term nor do I expect home prices to drop further,” said Erik Hurst, a professor of economics at the Booth School of Business, citing the excess supply of houses and continued weak demand from home buyers.
“We need to work through the inventory of extra houses, accumulate additional saving, and reallocate workers and capital from the housing and finance sectors to other sectors. This process just takes time,” Hurst said.
Source: University of Chicago (11/30/2010)