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Housing Bust: No End In Sight

Nobody's home.
Spencer Platt
Getty Images
Nobody's home.

U.S. home prices fell to new, post-bubble lows in March, according to the latest Case-Shiller home price numbers. And with the wave of foreclosures continuing, it's hard to see an end to the housing bust.

Foreclosures and short sales are a key driver of falling home prices. They contribute to the glut of houses on the market, and tend to sell at discounted prices.

There are still nearly two million houses in the foreclosure pipeline, according to RealtyTrac.

"At the first-quarter foreclosure sales pace, it would take exactly three years to clear the current inventory of 1.9 million properties already on the banks' books, or in foreclosure," RealtyTrac's CEO said in a statement last week.

What's more, the percentage of homeowners who are underwater — who owe more on the mortgage than their house is worth — is still rising. Of all single-family homes with outstanding mortgages, 28 percent were underwater in the first quarter of this year, according to Zillow.

People who are underwater are at higher risk of being foreclosed on, or being forced into a short sale. So the high percentage homeowners who are underwater suggests more foreclosures are likely. And all those foreclosures will continue to put pressure on home prices.

Home prices, which peaked five years ago, have now fallen to where they were in 2002. Over the past year, prices fell in 19 out of the 20 metro areas tracked by Case-Shiller. Here's the complete list:

Percentage Change In Home Prices, 3/10 - 3/11

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Jacob Goldstein is an NPR correspondent and co-host of the Planet Money podcast. He is the author of the book Money: The True Story of a Made-Up Thing.