6/23/2009

Housing prices continue to fall, no bottom in sight, foreclosures keep rising

I have written many times about how the Obama administration's policies are hurting the housing market (and they have been doing it even before he became president). Bloomberg has this:

U.S. home prices fell 6.8 percent in April from a year earlier as rising unemployment and record foreclosures kept buyers out of the market.

Measured monthly, the average price fell 0.1 percent from March, the Federal Housing Finance Agency in Washington said today. The number was projected to drop 0.4 percent in April, according to the median forecast of 15 economists in a Bloomberg survey.

The housing slump has reduced the median price of an existing home 26 percent from the July 2006 peak, pushing affordability to near record levels. Prospective buyers are now being constrained by rising mortgage rates, the highest unemployment since 1983 and concern the housing rebound will be anemic.

While U.S. builders increased housing starts by 17 percent in May to an annual rate of 532,000, a May 26 report from S&P/Case-Shiller showed home prices in 20 U.S. metropolitan areas fell 18.7 percent in March from the same month last year.

All signs point to further declines. Yale University Professor Robert Shiller, co-founder of the S&P/Case-Shiller index, said earlier this month that prices will continue to fall, contributing to a prolonged recession. . . . .

U.S. foreclosure filings are forecast to hit a record 1.8 million in the first half of this year, according to RealtyTrac Inc., the Irvine, California-based seller of default data. Filings surpassed 300,000 for the third straight month in May, RealtyTrac said on June 11. . . . .

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3 Comments:

Blogger 1 said...

Hmmm, over at the Carpe Diem site the following WSJ article:

UPDATE: US Home Sales Rise Second Straight Month In May

There seems to be a bit of a conflict here or am I misreading both stories?

6/23/2009 1:13 PM  
Blogger John Lott said...

Well, I just described the Bloomberg headline and quoted the story. The WSJ news pages have been pretty biased. Note that when the GDP numbers showed a 5.9 percent drop in the first quarter, the WSJ had a positive headline about things improving.

6/23/2009 5:10 PM  
Blogger 1 said...

"Note that when the GDP numbers showed a 5.9 percent drop in the first quarter, the WSJ had a positive headline about things improving"...

Funny thing here Professor John, you actually touched on my next question...

I have to wonder what's in it for the WSJ to skew the story...

Thanks for that...

6/24/2009 6:53 AM  

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