The housing downturn has gone from bad to worse, with the FHFA index showing that prices in the first quarter fell at a faster rate than at any time since the height of the financial crisis in late 2008. This time prices are not being driven down by a plunge in confidence and a sudden contraction in credit. Instead, they are being depressed by a chronic lack of demand and the effects of many foreclosed sales. With the foreclosure pipeline still full, prices will fall throughout this year, and perhaps next year too.
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