No Rise in Home Prices until 2020: Bankers

[dkf]

Home prices are unlikely to recover before 2020 and mortgage defaults will persist for years, says a survey of bank risk managers out Friday.

The survey conducted by the Professional Risk Managers’ International Association for FICO, found that 49 percent of respondents do not expect housing prices to rise back to 2007 levels for another nine years. Only 21 percent of respondents said they would.

The findings, which authors called “a decidedly pessimistic outlook”, are a sharp reversal from cautious optimism the survey respondents expressed late last year and in early 2011.

In addition, 73 percent of surveyed bankers say they expect mortgage defaults to remain elevated for at least another five years. And 46 percent believe mortgage delinquencies will increase over the next six months.

Only 15 percent of respondents expect mortgage delinquencies to decline during that period.

http://www.cnbc.com/id/44735283

[emcguffie]

1. Yeah, not until the banks own most of the mortgages.

Once they own them, then they'll regain their value, and people will buy them and there will be another bubble and then the banks will get them back again. Unless we somehow find a way to change things, really change things.

[dkf]

3. Why would they want more mortgages if that is the case?

That sounds like a losing proposition.

[wryter2000]

2. When Bush screws something up, it stays screwed

I keep telling my sister-in-law that one day I'll have paid off my mortgage and for sure then I'll have some equity in my house.

[gulliver]

4. Too funny.

Are these the same bankers who did such a great job predicting home prices back in 2007?

This is like Republican predictions. If they warn you about something, you're safe. It's when they aren't warning you that you have to worry.

[dixiegrrrrl]

5. Remember:" The housing crisis is contained at the sub-prime level"?

Brownie points to anyone who remembers who said that.

[dkf]

7. The problem is if they loan based on those assumptions.

We saw what happened earlier, and how it affected their behavior. If they reverse that and are too conservative for the next decade where does that leave us?

[customerserviceguy]

6. Agreed

The housing market is in deep doo-doo, and will remain so for many years. One consolation is that if the Repukes kick Obama out of the White House, they'll have it drag them down, too. Maybe we can get some true progressives in by 2016 or so.

[dkf]

8. No housing = no construction = no jobs.

[Safetykitten]

9. Try 2040.

[dkf]

10. It took 20 years for Hawaii real estate to recover after the Japanese caused a bubble.

A lot of people I know were under water for a long long time but everyone made it out ok.

The thing is that even if values had fallen, it was still possible for their income to support the payments.