Reuters reported this morning…

US home prices fall for 8th month in Feb -S&P/Case
(Reuters) – U.S. single-family home prices fell for an eighth straight month in February, inching closer to an April 2009 trough, a closely watched survey said on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in February from January on a seasonally adjusted basis, slightly better than economists’ median forecast for a drop of 0.3 percent.
The 20-city composite index was at 139.27, holding just a hair above its 2009 low of 139.26. Average home prices across the United States are back to levels where they were in the summer of 2003.

What was interesting is that while everyone is pessimistic, predictions are for prices to move down mildly. No big drops. No small drops forever either. It’s as if they think the bottom is near. But how?
Listen to this interview with Diane Swonk from April 19, 2011. A bit later in the tape, they discussed the sorry state of the mortgage market.
There is basically no lending outside Fannie and Freddie, poor demographics and high unemployment. If we can’t get new homeowners in, the current ones can’t move up the ladder.

• Karl Case Says Potential Home Buyers Renting Instead
  April 26 (Bloomberg)– Karl Case, economist and co-creator of the Case-Shiller index of home prices, says risk aversion is leading potential homebuyers to rent instead of purchase. Case talks with Bloomberg’s Ken Prewitt and Tom Keene on Bloomberg Radio’s “Bloomberg Surveillance.”

Seems like a no-brainer to me.