U.S. Housing Prices Have Bottomed

Here's an indicator that we've seen the bottom of the U.S. housing market: Companies are beginning to sell insurance against price declines. Home Value Insurance, licensed just last month in Ohio, sells insurance against a decline in value of the customer's home. If the customer sells the house below its purchase price and the S&P Case-Shiller indices show a decline, then the customer may make a claim against the policy, subject to a deductible and other conditions.

If the housing market were clearly headed for further losses, companies wouldn't begin offering this insurance now. Therefore, this seems to be a strong indicator that in most U.S. metropolitan areas the decline in housing values is at an end.