Home prices crept forward in July. Ten of the 20 cities saw year-over-year gains and only one – Las Vegas – made a new bottom, as the impact of the first time home buyer program continued to fade away. The year-over-year growth rates for 16 of the cities and both Composites weakened in July compared to June. While we could still see some residual support from the home-buyers’ tax credit, which covers purchases closing through September 30th, anyone looking for home price to return to the lofty 2005-2006 might be disappointed. Judging from the recent behavior of the housing market, stable prices seem more likely. In the monthly data, 12 of the 20 MSAs and the two Composites were up in July over June; but the monthly rates also seem to be weakening. The next few months may give us an idea of the true strength of the housing market, as the temporary economic stimuli will have ended. Housing starts, sales and inventory data reported for August do not show signs of a robust market, and foreclosures continue.
—David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s: via S&P
The big happening in housing markets right now is the decline in buyer demand and stagnating supply. A huge portion of potential demand can’t afford a home or get a loan.
The housing market continues to face significant headwinds from high unemployment and foreclosures, which are impeding a broader recovery, and recent net order trends in the homebuilding industry have injected additional caution into our near-term outlook
—Jeffrey Metzger, CEO, KB Home: : via Bloomberg
Results during the spring months have clearly benefited from demand created by the since expired homebuyer tax credit. Also contributing to recent firmer results is that seasonally the spring/early summer months are the most vibrant for the housing market… Therefore, looking ahead, the demand air-pocket caused by the end of the tax credit will combine with seasonally slower activity, which will create a downside double-whammy for prices.
—Joshua Shapiro, MFR Inc: via WSJ
It’s bouncing along the bottom, it stopped that free- fall…The combination of the tremendous drop in prices, the fall in interest rates, the government going all in and buying mortgage-backed securities to keep mortgage rates low, and the credit, of course — it’s not surprising that it’s come to an end.
—Karl Case: via Bloomberg