Fed Official: More Housing Hurt Likely

Forbes reports:

Homebuilders take heed. A Federal Reserve official warned Monday that the gloomy housing market is likely to get worse before it gets better.

"The ratio of house prices to rents—a kind of price-dividend ratio for housing—remains quite high by historical standards, suggesting that further price declines may be needed to bring housing markets into balance," said Janet Yellen, President of the Federal Reserve Bank of San Francisco, at a speech to the National Association for Business Economics.

Yellen said the futures markets for house prices also point to further declines in a number of metropolitan areas this year. She said the problem could be exacerbated by a decline in employment.

Here's KBH,TOL,and LEN.