Housing Prices Inch Upwards

 

The first-time home buyer tax credit was instrumental in helping stop the free fall in house prices. The extended and expanded tax credit should prevent further dramatic declines in these prices, boosting the confidence of prospective buyers to re-enter the housing market. According to the S&P/Case-Shiller price index, house prices are back to around their fall 2003 levels. Housing will continue to rebound but may take more time than usual, following a tough recession.
-Courtesy of Standard & Poor's

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The first-time home buyer tax credit was instrumental in helping stop the free fall in house prices. The extended and expanded tax credit should prevent further dramatic declines in these prices, boosting the confidence of prospective buyers to re-enter the housing market. According to the S&P/Case-Shiller price index, house prices are back to around their fall 2003 levels. Housing will continue to rebound but may take more time than usual, following a tough recession.

Further, the year-over-year decline is no longer in the double digits that prevailed for more than a year and a half. The Federal Housing Finance Agency (FHFA) price index rose in the second and third quarters. As of the third quarter of 2009, it was down only 3.7 percent from the third quarter of 2008.

In many states and metropolitan areas, home prices and inventories have settled back to their long-term trend levels or below. In these areas sustainable production levels are possible going forward. The only uncertainty remaining is consumer confidence. In locations where excess inventory remains, house prices will continue to be soft and further declines are possible.

The national house price indexes will be determined by the delicate balance between the excess-supply markets and the markets that have found their equilibrium. NAHB is forecasting flat house price movement on a national level through the second quarter of 2010. ?EUR??,,????'?????<