- Dennis Norman
By: Dennis Norman
Today the Federal Housing Finance Agency (FHFA) reported that U.S. home prices rose 0.3 percent on a seasonally-adjusted basis from June to July and are down 4.2 percent for the past year.
Many of the reports I’ve seen in the press on this are saying this is a sign of the housing market recovering:
The Wall Street Journal, on WSJ.Com, Reported “U.S. Home prices climbed in July as some of the country’s worst-hit housing markets showed signs of recovering.”The AP reported “U.S. home prices rose slightly in July from a month earlier, according to a government index, further evidence the housing market is stabilizing.”Snaps goes to Bloomberg.com for I feel being more alert by reporting “U.S. Home prices rose 0.3 percent in July from the previous month, less than analysts’ estimates, in a sign that the housing recovery is tenuous.
I think calling this an indication of a housing recovery is very optimistic. Hey, I want the market to come back as much as anyone, it has been very painful for me personally, but I’ve seen it before; positive talk won’t change the market.
Let’s remember, only a couple of weeks ago, the National Association of REALTORS(R) reported that the median price of existing homes sold in July DECREASED 2.0 percent from June and the US Census Bureau and HUD showed the median price of new homes sold in July declined slightly from June, so there are definitely mixed indicators. In addition, there are some big discrepancies in year over year data. The FHFA is reporting a decrease of 4.2 percent in home prices from July 2008 to July 2009. NAR reported a decrease of 15.1 percent for the same period, and Case Shiller reported a 14.9 percent decrease from the 2nd quarter of 2008 to the second quarter of 2009.
What I do think the current data shows, is that prices may be stabilizing which in itself would be a very good thing. Case Shiller should be releasing their home sale price index data for July any day now…my guess is that report will show their 20 city composite index somewhere between one percent below or one percent above the June index, which would also support the idea of prices stabilizing.
As far as a recovery in the housing market, we need to take baby-steps. Prices need to stabilize, mortgage delinquencies need to drop significantly which will eventually lead to the foreclosure rate dropping back to something closer to a normal rate. Oh yeah, some jobs for home buyers would help too…
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