Housing Weighed Down by Dismal Economic News

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Recent economic news has been dismal. The second estimate of growth in the gross domestic product for the second quarter was revised down from an already low level to 1 percent, following just 0.4 percent in the first quarter, well below where growth normally would be two years out from a recession. Consumer confidence has been plunging, falling to levels typical of the months leading to a recession.

The housing sector, weighed down by weak economic activity, has experienced mixed results. House prices are no longer falling, with both key indicators — the Case-Shiller and Federal Housing Finance Agency house price indexes — showing three consecutive month-over-month increases.

The Housing Opportunity Index shows housing affordability hovering near record high levels over the past several quarters.

The rate of foreclosures started continues to edge down, as has the stock of houses ready to enter foreclosure, i.e., mortgages with payments more than 90 days past due.

New home sales remained steady in July, bouncing around at the same low level since the beginning of the year.

– Courtesy of NAHB