Further signs of a strengthening housing market were reported
today, even as other indicators suggest that the overall economy is
slowing down.
U.S. home prices rose for a third consecutive month in May,
according to figures released today by the data firm CoreLogic,
increasing by 1.8 percent over their April level. On an annual
basis, prices were up 2.0 percent from May 2011.
Excluding distressed properties such as foreclosures and short
sales, prices were up by 2.3 percent for the month and 2.7 percent
from their May 2011 level.
Further gains expected
Looking ahead, the company predicts an additional 1.4 percent
increase in overall home prices in June, with a 2.0 percent gain
when distressed sales are excluded, according to figures from its
index of pending home sales, based on signed sales contracts for
sales that have not yet been finalized.
"The recent upward trend in U.S. home prices is an encouraging
signal that we may be seeing a bottoming of the housing down
cycle," said Anand Nallathambi, president and chief executive
officer of CoreLogic. "Tighter inventory is contributing to broad,
but modest, price gains nationwide and more significant gains in
the harder-hit markets, like Phoenix."
Biggest increases among modestly priced homes
Price gains are most pronounced at the lower end of the housing
market, according to Mark Fleming, CoreLogic chief economist. Over
the past year, homes in approximately the bottom third of the
market saw prices rise by 5.8 percent, while those in roughly the
upper third saw a gain of only 1.8 percent.
The CoreLogic figures are the latest among a number of recent
reports pointing to a strengthening housing market. Other reports
in the past two weeks have seen a rebound in home prices in the
S&P/Case-Shiller indices, increasing pending home sales
reported by the National Association of Realtors and higher new
home sales reported by the Census Bureau.
Slowdown in the works?
At the same time, other indicators are pointing to a slowdown in
the overall economy. Consumer confidence is down, while
manufacturing output fell in June for the first time in three
months. That's a particularly worrisome indicator for the economy
at large, because manufacturing is considered a leading indicator
for overall economic conditions.
At the same time, housing and new home sales in particular are
considered strong drivers of the economy, so at this point it's
hard to say which trend is the true indicator of the economy's
direction at this point.
First published at:
http://www.mortgageloan.com/more-signs-rising-home-prices-9101