Housing slump: The new normal?
America's economic troubles began when the housing bubble burst, so economists who are looking to housing for any signs of a recovery may see some. A report out Tuesday says home prices in 20 cities rose in July nine-tenths of a percent from the previous month.
But prices are still down 4.1 percent from the previous year. And housing prices are down 30.9 percent since the housing market peaked in June 2006. CBS News correspondent Anthony Mason explains on what to make out of the latest numbers.
In their Ferndale, Michigan home, Ray and Brianna Scott are underwater -- deep underwater.
"It's terrible," said Ray. "It's not the way it should be."
Six years ago, they bought the house they're raising their two sons in for $132,000. But even with a slight increase in value in recent months, it's now worth only about $80,000.
"We're $50,000 roughly in the hole," said Ray."We're probably never going to get that back."
Not at this rate. The Case-Shiller survey found that in 18 of 20 major metropolitan areas, house prices have declined over the past year. Only Detroit and Washington, D.C. have seen slight gains
Video: House prices drop, sales drop even further
"What will it take for a housing recovery?" Mason asked Yale economist Robert Shiller, co-founder of the Case-Shiller index, who has tracked home values back to 1890.
"Why is there gonna be a housing recovery?" Shiller responded.
He added: "House prices are not high anymore, but they're not low either by historical standards. So if confidence were to slip more, home prices could fall further."
Shilller's chart shows that leaving out the housing slump during the Great Depression, and the housing bubble before the Great Recession, home prices historically have only risen at about the rate of inflation.
"So I don't know why people are all thinking, 'When is a housing recovery coming?'" said Shiller. "I don't plan on that at all."
Which leaves families like the Scotts underwater and out of options.
"It's not that we hate where we're at," said Ray. "It's just at this point we really can't do anything else but be here."
The Scotts worry that another recession could knock even more value off their home. Robert Shilller said that rather than a recovery in house prices, the best to hope for would be stability.
CBS Evening News anchor Scott Pelley asked Mason if people like the Scotts are waiting for home prices to increase before they put their house on the market and what they should do.
"They're going to wait for a long time probably," said Mason. "That's the problem. Foreclosures are putting an enormous amount of [downward] pressure on prices. Schiller's point is even after prices stabilize, history shows us that we shouldn't expect much of an increase. As he pointed out, this may very well be the new normal."
