After the Federal Reserve announced that it would continue to implement aggressive policies that are designed to increase economic growth while decreasing the unemployment rate, some analysts wrote that they believe the moves will also help home prices. According to the Financial Times, “In the US, the housing market appears to have finally bottomed out. But real estate securities, particularly commercial mortgage-backed securities [MBS], are staging an even more robust comeback, because they are the closest substitutes for the MBS the Fed is likely to purchase.” The Fed will be buying $40 billion worth of MBS a month, in what is an open-ended commitment to that market. The Fed’s goal is to push down mortgage rates by lowering the cost of funds for mortgage providers. The Times noted...

The Wells Fargo Securities Economic Research team recently presented a summary of how demand in the housing market has been increasing this year. The economist wrote, “The housing market itself has shown consistent, albeit begrudging, improvement over the past year.” Demand for housing continues to look up According to the report, sales of existing homes through the first seven months of this year are running 7.9 percent above their year-ago level and the inventory of existing homes has dipped down to just a 6.3-month supply. For the first seven months of 2012, new homes sales have also perked up, rising 20.8 percent from their year-ago level. All of this creates an environment where inventories of new homes are at an all-time low, potentially spurring home construction  if builde...

For many people, their home is their largest asset. Many people paid on a home mortgage for years and built up significant equity in their homes. This is true for most home owners despite the fact that home prices have fallen in many parts of the country. Recently, there have been an increasing number of signs that the bottom has been seen in home prices. Why experts predict we’ve already seen the bottom in home prices The latest sign was recently reported in the Los Angeles Times, which noted “The Santa Ana research firm CoreLogic estimates that the number of homeowners in the U.S. who owed more on their homes than those properties are worth totaled 10.8 million American households, or about 22.3 percent of all homes with mortgages, at the end of the second quarter.” That wa...

Home prices have been moving higher nationally according to the most recent reading of the S&P/Case-Shiller home price index. The index reports on prices nationally and for 20 major cities. The most recent report, which reported on home sales from May, showed improvement in all 20 cities that are tracked. Prices were up, or at least unchanged, from April. Collecting data on real estate transactions takes time to collect so the index is released with a two month delay. The state of the real estate market as it relates to prices, today Home owners in Chicago and Atlanta enjoyed the largest monthly increases. Prices were 4.5 percent higher in Chicago and up 4 percent in Atlanta. Home owners in Atlanta were probably very pleased with the data. That city has been especially hard hit in the ...

Every month, consumers are asked what they think about the economy and the results are compiled in the Thomson Reuters/University of Michigan sentiment survey. The latest reading presents a more positive outlook among consumers than other recent data suggests. The Michigan survey’s index of current conditions, which reflects American’s perceptions of their financial situation and whether they consider now to be a good time to buy big-ticket items like cars or houses, improved to 87.6 from 82.7 the prior month. This is the highest value for this index since January 2008. In another question, the index of consumer expectations six months from now, which analysts believe more closely projects trends in consumer spending, fell to 64.5, an eight-month low. Also included in the confidenc...

Home prices have fallen in many parts of the country over the past five years or so. This makes home ownership seem risky to some and fear of future declines will keep some families from buying homes. This behavior is commonly seen in stock markets where investors sell shares during a decline, the exact time when they should be adding to their holdings (commonly speaking). In the long-term, stocks work out to be a good investment and homes have also been a good, inflation-beating investments for the long-term. But is home ownership losing popularity? But, according to Bloomberg, many younger workers are bypassing home ownership in favor of renting despite the fact that the economics favor purchases. The article noted that, “In 2011, the smallest percent of first-time home buyers purchase...

Home builders were busier in July than they had been at any time in the past four years, according to the latest data from the Commerce Department. In July, builders filed for more new construction permits than they had since home prices peaked. While construction starts did decline slightly, the numbers still point to gains in the market. Economists consider applications to be an indicator of the amount of future construction being planned. Permits have a cost, so builders will only apply for a permit when they are reasonably certain they will be completing the construction, the notion goes. Building permits filed in July At an annual rate, builders filed 812,000 permits in the month, the highest level seen since August 2008. Housing starts, another data point followed by economists to ga...

Recent news stories have highlighted the fact that nearly 74 percent of new and existing home sales for the three month period ending June 30 were priced affordably. In order to qualify as an affordable home, it must be affordable to families who earn the national median income of $65,000, according to the National Association of Home Builders (NAHB). The NAHB partners with Wells Fargo to measure home affordability each quarter. What the recent “home afforability” index numbers tells us While homes are affordable, they are slightly less affordable than they were in the previous quarter. This quarter’s total is down from 77.5 percent a quarter earlier. Experts are quick to point out that home prices are still very affordable from a historic standard. Barry Rutenberg, NAHB̵...

Before prices can go up after a crash, they first have to stop falling. The latest data on home prices indicates that may be happening on the national level. The latest reading of the Standard & Poor’s/Case-Shiller home price index showed that prices increases in each of the 20 cities tracked that are tracked individually. Nationally, home prices were up 2.2 percent from April to May, the second consecutive gain after a seven month streak of flat or falling prices. Over the past twelve months, the national price index has shown a drop 0.7 percent, a decline but it is the smallest decline recorded since September 2010. A month earlier, the one year decline totaled 1.8 percent. There was a great deal of variability with the different markets. Chicago, Atlanta, and San Francisco rep...

Real estate experts at Zillow, a website that tracks home prices all around the country, have turned optimistic. This optimism is based on the most recent data collected by the site which shows that home prices posted their first year-over-year gain since 2007. Nationally, home values moved up by 0.2 percent in the second quarter of 2012 when compared to the same quarter in 2011. The first quarterly gain in five years is sign that the bottom has finally been reached. Prices have now risen for four consecutive months. Zillow Chief Economist Stan Humphries noted that “The housing recovery is holding together despite lower-than-expected job growth, indicating that it has some organic strength of its own.” However he cautioned home owners that the future will not include a rapid return to ...