Double Dip in US Housing is OFFICIAL…What Does That Mean?

Normally, a double dip refers to a light-medium social faux-pas. But today when you overhear the phrase, it’s likely to mean something much more dire.

The US housing market has been fearing it, and now it’s finally official: a double dip in the housing market.

So what the heck is a double dip anyway? It’s pretty simple, really: if a market falls, rebounds, and then falls again – then that’s a double dip. It appears in graphs as a “W”, when it’s all said and done.

So, in 2007-2008. . . basically *&#$ hit the fan. Prices began to plummet as sub-prime mortgage holders defaulted. And, subsequently, mortgage-related asset-backed securities took a nosedive as well.

But then, in 2009, things were looking a bit more optimistic for the home market. Ramped up by government programs to stimulate the market, prices continued to fall – but at least at a slower pace than before.

Early 2010 even saw some improvement in home prices, but that rebound was short-lived. And now we’re sliding down the second side of the “W”.

According to Standard and Poors:

“Data through March 2011, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indicies, the leading measure of U.S. home prices, show that the U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.”

That doesn’t sound good – and that’s because it’s not. What the US has feared the most, other than terrorism of course, has finally come to fruition.

So next time you’re at a dinner party with an American, be especially careful how many dips you give that piece of celery – you might hit a sore spot.