A few weeks ago, I wrote that home prices had double-dipped. And last week, that was officially confirmed.
The S&P Case-Schiller home price index fell 3.6% in March, the eighth consecutive monthly decline. And the report “is marked by the confirmation of a double dip in home prices across much of the nation”.
The news was already bad a few weeks ago, when Clear Capital reported that “prices have double-dipped…below prior lows experienced in 2009”.
Today the news looks really bad: Case-Schiller reported that “nationally, home prices are back to their mid-2002 levels”.
And worse than that, according to Capital Economics, housing is now in a depression: “on the Case-Schiller measure, prices are now 33% below the 2006 peak…this means that prices have now fallen by more than the 31% decline endured during the Great Depression”.
Of course, there were other factors that made the Great Depression what it was: the markets dropped 75%, GDP declined 30%, and unemployment hit 25%.
But the problem we are facing today is that, typically, the economy can rely on housing to serve as a driver during a recovery. But that’s not happening this time. This time housing has proven to be more of an economic anchor instead.