Analysts Unsure Housing Market Turned Around
A pair of housing price indicators seems to show that the housing market in the U.S. might have hit bottom and be ready to rebound, but analysts are unclear if that is what they mean.
First, the Federal Home Finance Agency, the regulator and de-facto manager of both Fannie Mae and Freddie Mac, reported that by its records, housing prices increased 0.8% in May, following a 0.7% in April.
This means that the year-over-year rate is up 3.7%, compared to an increase of 3.0% year-over-year increase in April. The FHFA tracks single-family homes using data from its regulated organizations based on conforming conventional mortgages purchased by those agencies.
Second, Zillow, a home and real estate marketplace that maintains an extensive database on home values, has reported home values increased 0.2 percent from the second quarter of 2011, the first year-over-year increase since 2007. According to its records, residential values increased in 53 of the 167 markets it tracks across the country.
But Brian Turner, chief strategist at Catalyst Strategic Solutions, a financial and market consultancy in Plano, Texas, expressed skepticism that those numbers bring as good news as some might hope.
“Home sales continue to sputter despite historically low mortgage rates due to job insecurity, continued fear of falling values and general economic uncertainty,” Turner wrote in an analytical note about the news. “Over the past two years, the housing market seemed to be on the verge of a turnaround during the first quarter, only to fall back during the second.”