Housing prices continue to fall

More good news today: the Case Shiller index of home prices continues to fall. This chart shows the inflation-adjusted value of the index according to my calculations, plus a projection for where the year-end value will be. So far, prices in real terms are down by 27% from their peak. By year end, prices could be down by 30%. That might be enough to call a bottom, but perhaps they fall a bit more; in any event we have seen a substantial correction in prices and a consequent significant improvement in affordability. I have a more detailed discussion of this subject here that points out the severe lagging nature of this index among other things.