Significant home price decline may be coming

Despite signs that the housing market and home prices may be stabilizing, a new report says that the continued slow rate of moving activity will cause home prices to drop further in the coming months as the market continued to search for a bottom.

The housing forecast from Fiserv says that the data firm expects prices to show a decline of 7.1 percent in home prices during the 12-month period that started June 30, as the trend of fewer families moving into new homes has continued to foster a climate of reduced housing demand and sellers continually cutting prices.

What makes the forecast so startling is the abrupt change it predicts from just nine months ago. The company's February report predicted that prices would gain 4 percent by the end of 2011.

A further drop in home prices would only accentuate the current homebuying climate, which is already heavily titled toward buyers. A recent study by Beacon Economics found that buying a home was at its most affordable levels in more than 40 years.