Economy, Housing Market on the Rebound
According to a recent article by Realtor® Magazine, the U.S. recession appears to be bottoming out and the economy is gearing up for a recovery. This opinion is supported in reports from economists for the Conference Board that show the index of leading economic indicators rose 0.6% in August of this year, the fifth straight increase.
Five of the 10 leading indicators used to forecast economic activity for the coming six to nine months improved in August while two others remained unchanged. The coincident index, which measures current activity, experienced an upwardly revised 0.1% gain in July but remained flat in August. The increase in July was the first increase since September, 2008 and only the second since the recession began in December, 2007. Economists are predicting that the recession will officially end sometime in the third quarter.
In looking at how the housing market is being effected, the Chicago Tribune points out that U.S. home prices rose slightly in July from a month earlier, according to a government index. In addition to this sign that the housing market is stabilizing, the Federal Housing Finance Agency noted Tuesday that prices rose 0.3 percent in July from the prior month.
The index, which is based on loans owned or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac, is 4.2 percent below last year’s levels. It has declined less than other housing market measurements due to the exclusion of the most expensive homes and subprime loans that have fallen into foreclosure.
The Standard & Poor’s/Case-Shiller national index, another measurement of home prices, posted its first quarterly increase in three years during the April-June quarter.
Similar to the forecast for recovery from the recession, economists are confident that the decline in prices is coming to a halt but that gains in prices will be uncertain and patchy.
Are you convinced that we have seen the worst and that the housing market is back on the rise? Do you think there may be another drop in home prices next year? We would love to hear your feedback.
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