NEW YORK - July 15, 2011 - When will we reach bottom in the housing market? With lenders filing foreclosures more slowly and an excess inventory of homes, housing prices could fall another 20% next year, according to one economist.

Gary Shilling, one of the economists who predicted the subprime mortgage crisis, says the "depressing effect" of 2-2.5 million homes in excess inventory will push down prices.

"This would push underwater mortgages from 23%- 40% of the total, seriously depressing consumer spending, and wreak havoc among mortgages and related securities," he wrote in the July newsletter of his consulting firm, A. Gary Shilling & Company, Inc., based in Springfield, New Jersey.

Foreclosure filings, in which lenders take back homes with delinquent mortgage payments, decreased by 30% in the first half of 2011 compared to the same period last year. Banks seized 421,212 homes in the first six months of the year, down from 529,633 in the first half of last year, foreclosure listing company, RealtyTrac, Inc. said Thursday.

But questions that began last fall about hastily signed foreclosure filings, in part, have led to slower approvals. RealtyTrac estimates that 1 million foreclosure-related notices that should have been filed by banks this year will be pushed to next year.

With only 18,000 jobs added in June, the country also has a high official unemployment rate at 9.2%, though the actual unemployemtn rate is closer to 23%. Also contributing to a decrease in housing demand is an overleveraged consumer base and home prices that have already seen a double-dip decline, according to the Case-Shiller Index, said Shilling.