By Ian McKendry

WASHINGTON (MNI) – The U.S. housing market is at risk of a
fundamental shift where fewer Americans own homes, Standard & Poor’s
Chairman of the Index Committee David Blitzer warned Tuesday.

“A year from now, if we are still sitting in the same place, we
will have to conclude that a lot of people that would have bought a
house 10 years ago are not interested anymore,” Blitzer said.

In a interview on CNBC following the release of the
S&P/Case-Shiller home price indices, Blitzer said either Americans have
decided owning a home is no longer a good long-term investment, and
so they do not want to own homes anymore, or they are going to start
buying because the U.S. is running out of housing.

Blitzer pointed to U.S. Census Bureau data which indicates housing
starts are at about a half a million, below the one-to-one and quarter
million level many analysts believe is necessary to keep up with
household formations.

“We are both running out of buyers and pretty soon may run out of
houses if we don’t build some more,” Blitzer said.

Blitzer said the spring buying season usually gives the housing
market a seasonal boost but there is still a large inventory of
foreclosed homes that need to be “worked through.”

February’s S&P/Case-Shiller 20-City Home Price Index released
Tuesday fell 1.1% not seasonally adjusted month-over-month and 0.2%
month-over-month seasonally adjusted. On a year-over-year basis the
index fell 3.3% both seasonally adjusted and unadjusted.

Tuesday’s release marked the eighth straight month the adjusted index
fell and the seventh month in a row the index fell unadjusted.

The index also indicated home prices in Atlanta, Cleveland,
Detroit, and Las Vegas are below their 2000 levels.

Blitzer said looking at sentiment surveys and housing data it is
still not clear whether a fundamental shift to an America with a lower
home ownership rate will occur, or if things are going to turn around.

“It’s not really quite clear but I think sometime in the next year,
maybe sooner. (We’ve) got to see some clear signs,” Blitzer said.

** Market News International Washington Bureau: (202) 371-2121 **

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