We have been predicting a 2nd housing price drop here for months – I’m only just now starting to see the media pick up the story.
U.S. home prices will probably decline an additional 6 percent to 8 percent before bottoming, Pacific Investment Management Co.’s Scott Simon said.
Potential home buyers are being kept on the sidelines by policy makers tightening rules for government-backed loans and banks being more restrictive than required by Fannie Mae, Freddie Mac and the Federal Housing Administration, Simon said in a radio interview on “Bloomberg Surveillance” with Tom Keene from Pimco’s headquarters in Newport Beach, California.
“If you can borrow, housing is so cheap, but if you can’t borrow it’s infinitely expensive,” said Simon, the mortgage head at the firm, which runs the world’s largest bond fund.
To read more about the potential for an 8% drop in US home prices, click here.
