Despite recent increases in a number of the industry's home price measurements, and even an uptick in the company's own index of residential property prices, ""Fiserv Inc."":http://www.fiserv.com says the gains will be short-lived. The Wisconsin-based information technology firm is forecasting home prices to fall by nearly 5 percent more over the next 12 months.
[IMAGE] According to the ""Fiserv Case-Shiller Indexes"":http://www.caseshiller.fiserv.com, which covers trend data in 384 U.S. markets, single-family home prices in the United States rose 2 percent in the first quarter of 2010 compared to a year earlier, Fiserv reported Thursday.
It was the first year-over-year gain recorded by the company since 2006, but Fiserv says the national numbers mask the broad declines seen in most markets. Home prices were actually lower in 303 of the 384 metro areas included in the Q1 study.
Fiserv expects home prices nationally to fall by another 4.9 percent in the year ahead, as unemployment remains high, mortgage rates rise, and markets such as Florida,[COLUMN_BREAK]
Arizona, and Nevada add even more distressed properties to their inventories.
""The stabilization of residential real estate markets will take many years as buyers and sellers try to find price levels that clear large inventories of vacant homes from the market,"" said David Stiff, Fiserv's chief economist.
""Consequently, we expect to see prices bounce up and down around their lows for the next two to three years, especially in markets that experienced the largest home prices bubbles,"" Stiff continued. ""This will result in alternating bouts of optimism and pessimism regarding the housing market recoveryÃ¢â‚¬Â¦ [and] will make it difficult to know exactly when the housing market has reached its bottom.""
Steep home price declines are expected to continue in markets that have been hurt most by the housing crisis. From the first quarter of 2010 through the first quarter of 2011, Fiserv projects average home prices in Nevada to drop another 11.1 percent. In Arizona the company predicts a decline of 10.8 percent by March of next year, and Florida is likely to see prices fall another 8.8 percent.
According to the Fiserv Case-Shiller Indexes, at the end of the first quarter 2010, the median U.S. home price was $166,000. The median monthly mortgage payment fell slightly to 13 percent of median family income.
The ""S&P/Case-Shiller Home Price Indices"":http://dsnews.comarticles/home-prices-post-may-gains-but-sp-sees-no-sustained-recovery-2010-07-27 released earlier this week showed that prices were up 1.2 percent in May compared to April, and were 4.6 higher than May 2009. But Standard & Poor's put forth the same prognosis as Fiserv, that the gains were making only a temporary showing.