Housing prices rose unexpectedly in January. The S&P/Case-Shiller Housing Index posted a slight seasonally-adjusted 0.3% increase in January. This is the eighth consecutive increase for the index which measures home prices in 20 major U.S. metropolitan areas. The increase demonstrates a increasing stability in housing prices. The index is down almost 1% annually. Housing prices are off about 30% from their high in mid-2006.
Half full or half empty?
David Blitzer of Standard and Poor’s described the report as “mixed”, adding that “The rebound in housing prices seen last fall is fading”. Other housing indices have shown declines in December and January, and some economists are predicting the Case-Shiller index will also show losses soon. New and existing home sales have been trending downward for several months.
Bargain-priced foreclosures are one of the primary factors suppressing housing prices. Despite their mixed effectiveness to this point, I am somewhat hopeful that the Obama loan modification programs introduced last week will alleviate some of the downward pressure on prices.
There is some promising economic news today, as consumer confidence is rebounding as Americans believe the labor market is beginning to improve. Although confidence is still low, it surpassed the forecasts of most economists.
According to the report, increasing numbers of Americans believe incomes will rise and jobs will be more plentiful in the coming months. While the labor market and European debt problems will be a concern through the remainder of 2010, I am guardedly optimistic that the recovery will proceed slowly throughout the course of the year.
What is your take on the latest economic figures? Do they presage a broader recovery, or are they a calm before the storm? Join the discussion below.
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