Is Housing Back?

From Reuters:

Prices of U.S. single-family homes rose for the second consecutive month in June, exceeding expectations and adding to evidence that the three-year housing slump is easing, Standard & Poor's reported on Tuesday.

The S&P/Case-Shiller composite indexes of 10 and 20 metropolitan areas both rose 1.4 percent in June from May, almost three times the 0.5 percent increases of the month before. May's increases were the first in nearly three years.

Optimism over a housing recovery blossomed last week after reports showed rising confidence among homebuilder and sales of existing homes rose in July for the fourth consecutive month. Economists expect the sector's recovery could help the nation emerge from recession and further stabilize financial markets that have suffered their worst crisis since the 1930s.

The increases in May and June for the Composite-20 Index marks the first time in almost three years of back-to-back monthly increases, and the June increase was the largest monthly increase since October 2005 (see chart above, data here).

Comments

[HardwoodFlo...:]

Wake-up thank you. Than nonsense should be banned.

Aug 26 02:51 PM

[Russ Wetherill:]

Yes the non-seasonally adjusted Case Shiller (CS) numbers went up by 1.4% in June relative to May, but that is sort of like comparing a pig to a rhinoceros, isn't it? An adult rhinoceros is almost always larger than an adult pig. Right? So determining current rhinoceros growth rates by looking at current pig growth rates doesn't make a lot of sense. Why not compare the size of rhinoceroses this year to those of last year? In other words we should seasonally adjust the data for different times of the year to compare pigs to pigs or rhinos to rhinos.

So how did the seasonally adjusted (SA) CS increase in June? Well, it was up only +0.75% in June relative to May. And the May SA/CS number was slightly negative (-.020%, Comp20).

June prices always increase over May prices in a normal housing market. And June prices are almost always the peak prices during the year. That is perhaps the best that can be said about the market right now - that, to some degree, normality has returned.

Unfortunately, normality also means that prices start dropping in the fall and winter. So expect the CS data to go negative for the September numbers. But keep in mind that the CS Composite scores are based on a three-month moving average, so the data will remain artificially high until prior sales are cleared.

Aug 26 04:16 PM

[j-dub:]

If nonsense were to be banned, I'd have very little to say.............


On Aug 26 02:51 PM HardwoodFlooring wrote:

> Wake-up thank you. Than nonsense should be banned.

Aug 26 06:52 PM

[Can'tSpotAB...:]

When is SA going to can this clown? We need to start calling you Dr Happy. Come out of the ivory tower Mark!

Aug 27 12:02 AM

[CLH:]

Keep up the good work Perry. You are always right while the losers continue to make asses of themselves.

Aug 27 08:47 AM