Global| Jun 26 2007Housing Slowing Bouncing Maintaining Its Rise…Good Sign
Summary
Housing is still in the grip of a downtrend but prices are not plunging or even weakening further nor are sales trends worsening; in fact, they are showing some signs of stability. Housing rebounded in April and maintained most of its [...]
Housing is still in the grip of a downtrend but prices are not plunging or even weakening further nor are sales trends worsening; in fact, they are showing some signs of stability. Housing rebounded in April and maintained most of its gain in May - a good sign for the sector. Question: How bad is this??
A tale of two suburbs? Maybe it’s not of two cities but definitely a tale of two suburbs – one affluent and one not. Average house prices are up and strongly at 6.5% year/year. Yes, some of that owes to a weak result a year ago, but not all of it. And year/year price declines for new homes are not very common. Median prices are off for two months running and the last year/year decline was in September of 2006. For average prices, they fell year/year in April 2007; they last fell year/year in November 2006. Obviously high-priced homes are faring better in this housing cycle.
Stability in sales by region is shown in the table below.
| Momentum: Annualized Rates Of Change | Prices | ||||||
| As of: | Total | Northeast | Midwest | South | West | Median | Average |
| May.07 | Month-to-month percent change | ||||||
| May.07 | -1.6% | -11.0% | 30.8% | -7.3% | -1.9% | 1.5% | 4.5% |
| Apr.07 | 12.5% | 3.4% | -7.9% | 22.7% | 8.1% | -9.9% | -7.9% |
| Mar.07 | -1.5% | 91.3% | 0.0% | -10.2% | -3.9% | 3.0% | 1.2% |
| Annualized Rates | |||||||
| Total | Northeast | Midwest | South | West | Median | Average | |
| 3-Mo | 35.7% | 304.3% | 81.9% | 8.7% | 7.8% | -21.5% | -10.2% |
| 6-Mo | -14.6% | 53.1% | 4.0% | -23.9% | -23.6% | -3.3% | 15.1% |
| 1-Yr | -15.8% | 19.1% | -14.5% | -17.9% | -21.1% | -0.9% | 6.5% |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
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