Home prices relative to income are at their lowest levels in U.S. history and could go even lower, Capital Economics said Monday in its latest U.S. Housing Market Monthly report. Notably, the analytics firm is seeing a shift in the profile of buyers. Further, owner-occupants are not expected to benefit from dropping prices. Cash buyers and investors instead are moving into the housing market. These buyers "have driven 70% of the increase in existing home sales seen since last July, while first-time buyers have been responsible for just 6%," analysts at the Toronto-based firm said. Data from Capital Economics is in line with recent reports from Altos Research, which concluded that home prices fell another 2% in February in all 27 markets tracked by the research firm. Standard & Poor's also conceded recently that pending home sales are down nationwide for the second consecutive month, except for in the South where a slight upswing was recorded between December and January. The latest Capital Economics research note attributes home price declines to an influx of foreclosures and tepid housing demand. Because of this trend, investors with cash on hand are dominating the market as they hunt for bargains. In fact, 70% of the increase in existing home sales in the past seven months was driven by the investor market, while first-time buyers accounted for only 6% of home purchases. "Such favorable valuations mean there is plenty of scope for housing to perform well in the medium-term," analysts with Capital Economic concluded. "But over the next year, weak demand, high supply and many more forced sales of foreclosed properties will push prices lower." Write to Kerri Panchuk.