Morgan Stanley analysts released their Housing Market Insights report, according to a report by HousingWire. The Morgan Stanley report predicts that home prices will fall by five to ten percent in 2011, and then remain flat for four years. The analysts added, however, that home prices are still at risk of falling further, and that the housing trough may continue through 2012.
The analysts further reported that owner-occupied housing has not improved, citing stricter lending standards that are affecting mortgage originations backed by the Federal Housing Authority (FHA). Nonetheless, the report says that government-supported lending by Freddie Mac, Fannie Mae and the FHA are critical to housing market recovery. The analysts determined that federal policy changes are necessary for success, however.