Dirk

Housing Prices Rebounding

Theresa, that is why I used the seasonally adjusted numbers in the analysis, rather than the NSA data that is usually presented. I agree that we are not totally out of the words on the housing front, but some stabilization is a good sign. The last thing I would expect is a big rebound in prices. Relative to incomes and rents, housing prices are back near normal historical levels, not cheap, but near normal. However incomes are not doing all that well with UE near 10% and still rising, and with near record rental vacancy rates, there is a big risk that rental prices start to slide significantly, re increasing the gap and putting renewed pressure on prices. A second wave of foreclosures (banks have been holding off on FC's even as delinquency rates continue to climb) would also put a lot of pressure on prices. However, the current stabilization of prices might just slow down that second wave of FC's.