David Stiff, chief economist at Fiserv Case-Shiller, states that five to seven years is a “pretty standard time frame” for prices to come back after a large correction. Fiserv forecasts another 7% drop in U.S. median home prices until the housing market hits bottom by mid-2011. [Homebuilder ETFs Send Mixed Signals.]
Despite the mixed messages coming from the housing sector, SPDR S&P Home Builders ETF (NYSEArca: XHB) and iShares Dow Jones U.S. Home Construction (NYSEArca: ITB) have held up fairly well, gaining about 14% in the last year. But like the housing market, they too have a ways to go – they’re still 55% and 70% off their February 2007 highs.
For more information on the housing market, visit our real estate category.
Max Chen contributed to this article.