JPMorgan expects home prices to dip
JPMorgan (JPM) predicted a further dip in home prices this past month, forecasting another 4% to 5% drop in home values between now and mid-2012. In its June 2011 Home Price Monitor Report, the bank lowered its base home price forecast to a level that's 37% under peak price levels. The financial services firm blames its lowered price expectations on a supply-and-demand imbalance, as well as anemic consumer demand and disappointing economic reports. The good news is CoreLogic's home price index grew a slight 0.7% in April, which shows some signs of possible price stability, JPMorgan said. But home prices still declined more than anticipated in the first quarter, reaching a new post-2006 low, the bank said. Making matters worse, JPMorgan's Home Price Monitor report points to a 12% drop in pending home sales in the month of April. The bank said "a looming question is when and if lending standards will ease enough to boost demand." Write to Kerri Panchuk.