NEW YORK - December 3, 2009 - The meltdown of the U.S. housing market is not over yet, and home prices will soon start moving downward again as a flood of foreclosures loom, according to a well-known economist.

Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pennsylvania, said in a Wednesday interview with Reuters that home prices will resume their decline by early next year as foreclosure sales pick up again.

"The housing crash is not over," he said.

The U.S. housing market has suffered the worst downturn since the Great Depression, and its impact has rippled through the Depression-hit economy as well as the rest of the world. A setback for the hard-hit housing market could portend problems for the U.S. economy.

Home prices, as measured by the Standard & Poor's/Case-Shiller U.S. National Home Price Index, will trough in the third quarter of 2010 after declining 38%, said Zandi.

The index peaked in the second quarter of 2006 and hit a trough in the first quarter of 2009, a drop of about 32%. Home prices in some regions have been rising since then.

That is because foreclosure sales fell over the summer and autumn as mortgage servicers tried to put stressed homeowners into the Home Affordable Modification Program and other modification plans, he said.

"This lull in foreclosure sales has resulted in the price gains of the past few months," he said.