Major Bank Analysts Bearish on Housing Recovery

JPMorgan Chase has announced its analysts have lowered estimates for a recovery in the housing market between next year and 2014 because the expiration of the homebuyer tax credit slowed demand and overall economic malaise pushed some indicators lower in July. Analysts also said July's record plunge in existing home sales "may be overstated" due, in part, to increased demand caused by the homebuyer tax credit.

Estimates are about 546,000 sales were pulled forward by the credit and, while not particularly large, that number is enough to keep sales "noticeably low" for the second half of this year and first half of 2011. "The persistent high level of unemployment, the tight lending environment, a massive number of underwater loans and shadow inventory, and a potential increase in foreclosures will continue to drag home prices and prevent a V-shaped recovery," analysts said.