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Case-Shiller Home Prices Dip In June, Miss For 3rd Month In A Row
Home prices rose 4.97% YoY in June, according to Case-Shiller's 20-City index, missing expectations for the 3rd month in a row. Price appreciation has now been flat for 5 months - despite surging home sales - as bubblicious San Francisco saw price depreciation once again. Portland amd Denver saw the most appreciation in June. This is the second month in a row of sequential seasonally-adjusted declines in home prices, and along with TOL's dismal report this morning, suggests maybe another pillar of the 'strong' US economy meme is being kicked out... and Case-Shiller warn more than one rate hike by The Fed (or a stock market plunge) will stymie housing considerably.
Home price growth stagnates, misses again...
As Case-Shiller explain,
“Nationally, home prices continue to rise at a 4-5% annual rate, two to three times the rate of inflation,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “While prices in San Francisco and Denver are rising far faster than those in Washington DC, New York, or Cleveland, the city-to-city price patterns are little changed in the last year. Washington saw the smallest year-over-year gains in five of the last six months; San Francisco and Denver ranked either first or second of all cities in the last five months. The price gains have been consistent as the unemployment rate declined with steady inflation and an unchanged Fed policy.
“The missing piece in the housing picture has been housing starts and sales. These have changed for the better in the last few months. Sales of existing homes reached 5.6 million at annual rates in July, the strongest figure since 2007. Housing starts topped 1.2 million units at annual rates with almost two-thirds of the total in single family homes. Sales of new homes are also trending higher. These data point to a stronger housing sector to support the economy.
Two possible clouds on the horizon are a possible Fed rate increase and volatility in the stock market.
A one quarter-point increase in the Fed funds rate won’t derail housing. However, if the Fed were to quickly follow that initial move with one or two more rate increases, housing and home prices might suffer.
A stock market correction is unlikely to do much damage to the housing market; a full blown bear market dropping more than 20% would present some difficulties for housing and for other economic sectors.”
Perhaps indicating just how fragile all of this really is.
Charts: Bloomberg
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For at least the current day, this is bullish.
I want a mortgage with a negative rate.
FED raising rates? LOL. They are going to be fighting a rear guard action daily against the stock market until it bleeds completely out. No rate raise for a loooong time.
They'll only consider raising rates when they tire of giving CPR to the dead parrot.
Housing will drop in the meantime. No more foreign buyers. Their stock markets have crashed. Nothing the FED can do about that.
If the FED doesn't raise then that gives the markets the sign that even the smallest correction in equities will be fought. That could lead to some serious "irrational exuberance" which would likely bid up commodities and energy. That would mean a housing tank as consumers are already maxed out on fixed RE costs. So basically housing is going to enter a corrective phase soon no matter what the FED does...
rising far faster than those in Washington DC
OMG.....is the government dieing?
Maybe we should hold a telethon.
I pledge a month's salary to the effort..oh, wait, you want to save them?!
Fed better buy more MBS... The $1.7 T worth are not enough any more.
Spin, spin, sugar.
http://finance.yahoo.com/news/us-home-prices-rise-steadily-130643706.html
HFCS
After seasonal adjustment, national index up 0.1%http://www.wsj.com/articles/home-prices-remains-flat-in-june-case-shille...
So much spin depending on the writer's perspective.
A one quarter-point increase in the Fed funds rate won’t derail housing. However, if the Fed were to quickly follow that initial move with one or two more rate increases, housing and home prices might suffer.
Seriously who writes this stuff. They haven't increased rates for 7 years and all of a sudden the FED is going to increase FFR to .75 or 1%.
Repeat after me, no rate hikes until 2000andnever.
From my own, admittedly sporadic, observations, prices in the Bay Area have moderated a touch. Houses seem to be on the market longer, although I suppose that's a relative term. Six months ago, I'd see a "Coming Soon" sign, then before even seeing a "For Sale" sign, I'd see "Sold". Now, they're getting to market, but sitting for a week or two.
@Bay Area - not disputing your views, but the peninsula is still crazy. 1,200sq ranch on 6k sq ft lot =$1.250M Barely an open house.
Personally, our rent just raised $700 per month! - See ya later CA. We bought out of state = very happy! Local friends also don't see their future in CA
My cousin just sold her tiny condo in Seattle [to some sucka] for a whopping $918k ... which she bought in 2005 for $245k.
She moved across the country bought a beautiful 3,300 sf house for $363k and pocketed the difference. Getting about the same salary too.
According to CNBC this means supply is improving.
headline in yesterday's newspaper trumpeted that housing was hot in our area, prices increasing. yadeeyadayada. if that is true why isn't the realtor.com reflecting more activity other than an "active" listing for the majority that can be viewed?
zillow reflects a heap of foreclosed properties in various stages.
but i keep looking at netlifefinancial.com and wondering what in this crazy world is this all about?