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Housing Sec. Shaun Donovan on when home prices might rebound

Just about every economist agrees: We won’t see a strong, sustained recovery until housing -- the sector that got us into the mess in the first place – starts to turn around. Housing and Urban Development Secretary Shaun Donovan joined the Morning Joe gang Monday to talk about when that might happen.

Donovan started with the good news. “We’ve just been through the best winter of home sales in five years, really since the crisis began,” he said. “The number of folks in distress, the number of people who are delinquent in their mortgages, falling into foreclosure, [is]down dramatically. The number of new foreclosures is down by more than 50 percent since the president came into office.”

Sounds promising -- but don’t rush to put your house on the market just yet.

“The one place where we continue to see struggles is looking for a consistent strong recovery in house prices,” Donovan continued. “We’re seeing that in a lot of markets. But in the most distressed markets … it’s these foreclosures that are still coming on the market -- what we call the shadow inventory -- that are dragging down prices in a lot of places.”

“A full recovery is really going to depend upon moving this shadow inventory,” Donovan added.

Donovan didn’t hazard a guess as to when that might happen. But we built up such a glut of excess housing stock during the bubble years of the last decade that many analysts say it could take at least another few years for the housing market to return to something like normalcy.