Explaining Southern California's economy

The Housing Crisis: Can prices fall even farther?

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A foreclosure sign sits in front of a home for sale.

Another month, another Case-Shiller index on housing prices — and more bad news for the housing economy. This is from the Wall Street Journal:

The Case-Shiller data come on the heels of the White House's revamp of a mortgage-refinance program for "underwater" borrowers—those who owe more than their homes are worth. But economists say there are few quick fixes for the housing crisis, and easier refinancing rules will do little to address weak demand for homes.

"It was a very bad spring-to-summer-market season," said Nancy Wallace, a finance professor at the University of California at Berkeley. She said a turnaround in the housing market remains largely dependent on loosening credit and a surge in hiring. "People are almost afraid to apply for mortgages and lots of people have little scratches and dents on their credit right now."

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