While it is unlikely that housing prices will go into another free fall, the near-record vacancy rates will continue to put downward pressure on prices for at least the next couple of years, making unlikely that house prices will keep pace with inflation. Residential construction remains near its post-World War II low as a share of GDP, but is finally on an upward trend. Still it will not reach its normal share until at least 2014.

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For more, read the latest Housing Market Monitor.

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