Yellen, Janet

Along with the decline in construction, house prices have fallen by around 15 to 20 percent from their peak, depending on which measure you use.  Unfortunately, this is another case where the bottom is not yet in sight. First, the ratio of house prices to rents still remains high by historical standards, suggesting that further price declines are needed to bring housing markets into long-run balance. Second, the large inventories of unsold homes I mentioned—a growing share of which are foreclosures—also can be expected to continue to put downward pressure on prices.