Tuesday, October 5, 2010

Here's Why House Prices Will Now Drop Another 20%

One of our favorite economists, Gary Shilling of A. Gary Shilling & Co., has given us permission to publish the following excerpt from his latest monthly report.

Gary is also offering a special discount on his research service for Business Insider readers. To learn more, please visit Gary's web site or call 1-888-346-7444. Please mention Business Insider.

Housing: Great Expectations vs. Reality
Last spring, many believed that not only was the housing collapse over but that a robust rebound was underway. Investors were crowding into foreclosed house sales and bidding up prices in California, often the bellwether state for new trends. The tax credit of up to $8,000 for new homebuyers that expired in April spurred buyers and promised to kick-start housing activity nationwide. TheHomeAffordable Modification Program was trumpeted by the Administration to help 3 million to 4 million homeowners with underwater mortgages by paying lenders to reduce monthly payments to manageable size and then paying homeowners to continue to make those payments.

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