Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Case-Shiller Home Purchase Index UpFor the first time in almost three years. This may prompt more purchases in months ahead, as buyers seek to secure rock-bottom prices, and with the Federal $8,000 rebate set to expire in November. But delinquencies and foreclosures are still sky-high, as are unsold inventories, and job losses are expected by many to top 10% soon, and remain north of 8% through 2011. And the findings show important regional and price-level divergences. So, while relatively big news, the future is far from rosy, as even stockmarkets seem to have accepted (for the time being). From The Wall Street Journal:JULY 29, 2009 Wall Street Journal Home Prices Rise Across U.S. Bargain Hunting, Low Rates Drive First Gain in 3 Years; Double Dip Still Possible By NICK TIMIRAOS and KELLY EVANS Home prices in major U.S. cities registered the first monthly gain in nearly three years, according to a new report that provided fresh evidence that the severe U.S. housing downturn could be easing. Standard & Poor's Case-Shiller index, which tracks home prices in 20 metropolitan areas, rose 0.5% for the three-month period ending in May, compared with the three months ending in April. It marked the index's first increase after 34 straight months of decline, and came after a variety of housing indicators has shown glimmers of hope for the past several months. Home prices remained down about 17% from a year earlier, according to the index. According to S&P/Case-Schiller's seasonally adjusted numbers, which it began reporting only earlier this year, prices in May posted a 0.2% decline. But most Wall Street economists who discussed the survey focused on the April-to-May rise, saying it represents a significant change in direction. Home prices in 15 of the 20 areas in the survey rose or remained stable. The results were also consistent with other recent housing data, these economists said. Sales of new and existing homes rose for three consecutive months through June. Housing starts were up in June, and an index of builder sentiment rose in July, though both remained at low levels. May's uptick came in part as home prices in some areas fell enough for investors and first-time buyers to begin competing for bargains, helping to ease the backlog of unsold homes. Other likely sales spurs included mortgage rates that fell to 50-year lows, an $8,000 federal-tax credit for first-time homebuyers and the ability of buyers to secure mortgages from the Federal Housing Administration with as little as 3.5% down. The latest readings don't necessarily herald a full-blown recovery for the housing market or broader economy. Consumer confidence remains near record lows. The U.S. unemployment rate, at 9.5% in June, is expected to hit double digits before year end, making swift growth and an expanding labor force unlikely anytime soon. Read the rest of the article Labels: Case-Shiller Index, economic indicators, financial crisis, housing market Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
