Housing correction begins in earnest

The decade-long run-up in home prices, which has seen prices rise in some cities by over 150%, is now going into reverse, with national home prices falling in August for the first time in more than two years. While prices might tread water for a few more months, the slump in home sales suggests that there is little chance of the 'soft landing' predicted by others. We expect house prices to decline by 25% over the next few years.