Housing Affordabilty Index: 7.2 Point Drop in May From Rising Home Prices: Market Reached Bottom?
The National Association of Realtors' Housing Affordability Index remained high in May (171.6%) by historical standards (see chart above, data here), but fell by 7.2 percentage points from April's record high of 178.8%, mostly because of the increase in the median home price from $166,000 in April to $172,900 in May.
The 7.2 point May decline was the largest monthly drop in the HAI in four years, providing further evidence that the housing market may have reached a bottom. Watch for the HAI to continue to fall this year, as both home prices and mortgage rates rise and the real estate market continues to recover.
29 Comments:
They'd loan 4x income a couple of years ago, but will loan nearly 5x income now. Why the additional leverage?
Best wishes from Kansas! --Redbud
Real estate is definitely moving in Southwest Florida. There are great deals to be had and people are buying. Six months ago the banks were being very difficult in approving short sales on homes which already had buyers. Now those homes have gone into foreclosure and guess what.. the buyers are now picking them up for less than their earlier short sale offer! The banks tried to drag their feet on these short sale properties and were outsmarted at their own game! Next year these same properties will be sold to people who were "waiting for the bottom." Yes, the free markets are working!
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The Orange County (CA) Regsiter had a nice chart yesterday showing smaller declines in house prices for the county...looks like a few more months and house prices will hit bottom in OC.
Oh, the Bush Administration was a train wreck. But it is over. The lower prices are spurring sales, the low interest rates will work.
We are building up debts to the moon, and we have two choices: 1) Cut spending and hike taxes to pay them down; or run some inflation to invalidate the debt.
I actually prefer both 1 and 2.
"Oh, the Bush Administration was a train wreck. But it is over"...
Hmmm, interesting comment here benny the free marketeer but what part of it was a train wreck?
I have some of my own ideas on why George W's liberal domestic policies would cause problems but I'm curious as to your ideas...
Consider this IBD piece from May of '07: Bush's Real Record On The Economy
No. 1-
Bush "saved" AIG. A purely private-sector enterprise, where bond traders--adults--went to get insurance on privately-issued bonds they bought of their own volition. You didn't know those bonds were federally insured--at least under the Bush Administration? Neither did I.
Federal deficits--oh, don't me started. Bush had six years of R-Party domination in DC, and wasted every year.
Iraq? A Saudi-financed and manned group of thug-punks hijacks some jets, and we occupy Itaq, at a cost of trillion dollars or so. Then we establish a Islamic-Shiite state, which will likely make alliance with Iran (a Shiite state). Maliki loves Ahmendinijed, and the feeling is mutual. Yeah, Iraq really went to bat for democracy in Iran in the last fraud election, right?
We did not establish a secular state in Iraq. Christians and Jews had to leave after the fall of Saddam (a horrible cretin), and women go back a century.
I could go on. None of this fits with my free marketeer-libertarian-avoid-foreign-entanglements sentiments.
Let's just face facts: Bush was excrement from the rotting bowels of the Rebublican Party.
Obama may do better. Time will tell, but I am not hopeful. We seem to be getting in deeper in Afghanie and Pakistan. And forget the deficit.
We need a new party.
Bush was a train wreck that hasn't been cleaned up, and Obama is another train on the same tracks headed for that wreckage.
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Note there is a strong seasonal component in house prices, as emphasized here:
http://www.cavemanforecaster.com/2009/06/case-shiller-housing-index-apr09-data.html
Robert Miller-
My sentiments may differ from yours. I feel your beliefs are also deeply misguided.
However, I tend not to argue on an ad hominen level--although I follow the American tradition of heaping calumny on poor leaders.
And sheesh, blaming Clinton for a financial collapse eight years after he left office--a rather weak argument. R-Party trencherman controlled DC House, Senate, Supreme Court, White House. A total failure.
As for warm feeling towards Saudi Arabia, I have none. They run an oil cartel, with a dagger at our throats. Saudi money backed Osama bin Laden. No one can worship freely in Saudi Arabia, and women cannot vote or drive cars. They have financed a global string of schools spreading the virulent Wahhibi strain of Islam. Is this is an ally, then give unto us enemies. Only Bush thought Saudi Arabia was an ally, and perhaps Bush still receives royal visitations. The word quisling comes to mind.
How can you call bottom when your own chart shows that houses are still really unaffordable?!
Benny Free Marketeer says: "Bush "saved" AIG. A purely private-sector enterprise, where bond traders--adults--went to get insurance on privately-issued bonds they bought of their own volition. You didn't know those bonds were federally insured--at least under the Bush Administration? Neither did I.
Federal deficits--oh, don't me started. Bush had six years of R-Party domination in DC, and wasted every year."...
Hmmm, all very good points benny and I agree with them for the most part...
George W had an extrodinary allergic reaction to the veto pen it seemed...
Now this is to say the very least Benny very problematic: "Iraq? A Saudi-financed and manned group of thug-punks hijacks some jets, and we occupy Itaq, at a cost of trillion dollars or so. Then we establish a Islamic-Shiite state, which will likely make alliance with Iran (a Shiite state). Maliki loves Ahmendinijed, and the feeling is mutual"...
This sounds completely New York Times like...
As does this: "We did not establish a secular state in Iraq. Christians and Jews had to leave after the fall of Saddam (a horrible cretin), and women go back a century"...
I know missionaries that have gone over there in the last three years and they AREN'T being bullied by the local islamists of either sect...
Personally I think ALL of Robert Miller's comments are much more on target and accurate...
None the less Benny, thanks for the reply...
Well folks if you have a house or business property you want to sell you might want to hurry up and do it...
From CNSNEWS.com: Democrats’ Cap-and-Trade Bill Creates ‘Retrofit’ Policy for Homes and Businesses
The 1,400-page cap-and-trade legislation pushed through by House Democrats contains a new federal policy that residential, commercial, and government buildings be retrofitted to increase energy efficiency, leaving it up to the states to figure out exactly how to do that.
This means that homeowners, for example, could be required to retrofit their homes to meet federal “green” guidelines in order to sell their homes, if the cap-and-trade bill becomes law. (there's more)
No !-
Thanks for your reply.
I would like the names and e-mail addresses of any Christian missionaries who have any converts in Iraq, and who have established thriving houses of worship with visible Christian crosses.
My limited understanding is that a very few Catholic charities operate hospitals, but are not allowed to seek converts.
I won't even ask about Jewish houses of worship in Iraq....
A letter to the editor in the NYT re Christians in Iraq:
Iraq's Assyrian Christians; More of the same old
Published: Tuesday, February 17, 2009
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To outside observers, the provincial elections recently held in Iraq were strictly a domestic affair, with internal groups vying for relative influence. For the Assyrian Christians of Iraq, however, the elections signified a desperate appeal to the international community.
Amid the ongoing tragedy of persecution and mass expulsion, the Assyrian Christians spoke in unison through the ballot box: They insist on remaining in their indigenous homeland of Iraq, and only autonomy will guarantee their future there.
After years of neglect, it is time for the United States to live up to its commitments and answer this plea.
The Assyrians went to the polls with the trauma of the last six years very fresh in their minds.
Since 2003, over 40 churches have been bombed by Islamic militants. Numerous priests have been murdered, including the Chaldean archbishop of Mosul, killed last year shortly after he reminded extremists that the Christians of Iraq predate Islam.
Knowing that Assyrians lack militias or regional backers, terrorist groups understand that for every bomb and slain priest many Christians will flee their homes. And to this end, the militants have been dreadfully successful: While representing only 3 percent of the population, Assyrian Christians comprise over 20 percent of its refugees. Perhaps half of the pre-war Christian community has fled, in what one Iraqi bishop has dubbed a "campaign of liquidation."
While some have touted the success of the "surge" in reducing violence, the targeting of Assyrians has not diminished.
At the voting booth, Assyrians refused to abandon their rights. In Nineveh province, which includes Mosul and the Assyrian region of the Nineveh Plains, Christians voted overwhelmingly for the candidate put forward by the Chaldean Syriac Assyrian Popular Council.
In 2007, I attended a conference in Erbil, Iraq, that established the Popular Council, which has united Assyrians of all denominations as well as six political parties representing our people. The objective of the Popular Council is to secure a constitutionally recognized autonomous region in Assyrians' ancestral lands.
Unfortunately, the United States has thus far turned a blind eye to the Assyrians' plight. Today, despite all their efforts, the Assyrians cannot survive without the support of the international community and specifically that of the United States.
The opposition from the dominant Iraqi factions and the violence that they wield are simply too much. Though he was not the one to begin this war, President Obama now bears responsibility for those so terribly devastated by it.
For the sake and the future of my people in Iraq, I hope this responsibility is at last acknowledged and this plea fulfilled.
Paul Isaac, Dubai, United Arab Emirates
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Buy a house, now, are you kidding me! Why? Because they are going to quickly form a V out of this debacle?
That is just plain bad advice. Housing market work in cycles, like they always have in the past, and take many years to work through. The people jumping on the band wagon are the same muppets who chased the NASDAQ after it imploded. If the stock was worth $400 a year ago, it must be a screaming deal at $100. Well life doesn't work like that. See the NASDAQ and Nikkei post the meteoric bubbles. It ain't pretty. Housing just went through a meteoric bubble. Good luck cahsing that pie.
There is a reason housing has declined and will continue to decline and or flatten at some point. The reason, leverage built on top of lax monetary policy with a few crummy regulations squished in between.
If you think we are now back to the real estate grows @ a 7% clip era, you must be smoking those green shoots.
be patient, you will not miss this boat leaving the harbor any time soon.
1,
That's a pretty incredible stance for the government to take if they are really serious about retrofitting homes to be energy efficient. I just can't believe they would mandate that you replace all the 20 year old windows in your house before you could sell it. I also can't believe that government would pay 50% of that bill. Maybe states will just ignore that issue.
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Mr- Miller--
Perhaps I am a pinata, but that would imply you are swinging blindly, Mr. Miller. And usually missing.
And that I am sweet guy, ready to burst with good stuff for everyone!
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The real U.S. economy completely disputes "Bush was a train wreck." Also, to believe there's nothing good about Iraq is unrealistic.
The U.S. benefited tremendously from global imbalances, and it was inevitable they'd correct, either slowly or suddenly.
It's not understood, global imbalances were created by foreign governments. So, the U.S. government needed to respond appropriately. One imbalance was U.S. firms and households exchanged dollars for foreign goods, and then foreigners exchanged those dollars for mostly U.S. Treasury bonds. Consequently, dollars were drained from the U.S. economy, and those dollars needed to flow back to U.S. firms and households.
In 2008, the U.S. had an oil shock that was twice as big (in real dollars) than in the '70s. Yet, unlike the '70s, the U.S. didn't fall into a severe recession, until the credit market froze after Lehman failed (in Sep '08). Iraq, which is now a democracy, has the potential to quadruple its oil production, increase its oil revenue substantially, and add cheap oil to the global economy.
U.S. multinationals had a record 20 consecutive quarters of double-digit earnings growth in the 2000s. That "excess" capital was distributed to the masses, which raised actual output towards potential output (e.g. through the housing boom and related goods). Iraqi oil is very cheap to extract.
Export-led economies are the big losers in this recession, which is a correction to reduce global consumption. The U.S. already captured enormous real assets and goods, in the global economy, while export-led economies continue to hold worth less U.S. paper assets.
"I would like the names and e-mail addresses of any Christian missionaries who have any converts in Iraq, and who have established thriving houses of worship with visible Christian crosses"...
Ahhh Benny, not doubt about it, you're an abysmally ignorant @$$ho!e!
Patrick says: "That's a pretty incredible stance for the government to take if they are really serious about retrofitting homes to be energy efficient"...
Well Patrick if you are having a hard time believing it, maybe you can peruse at your leisure all 1428-page Waxman-Markey bill...
I too was reading/hearing what I thought was the most outlandish nonsene regarding this massive new tax but seeing is believing...
Now whether it all makes it through the Senate is another story but then again the thieves have a filibuster proof majority...
It seems, Bush foresaw "Peak Oil" and freed-up Iraq, which has the second largest oil reserves after Saudi Arabia, from a madman and his two sons, rather than shift into alternative energy, which was too expensive and unreliable.
No.1 -
I guess that means "no," you do not have examples of thriving Christian missions, replete with growing flocks, in Iraq.
You join Robert Miller in the dunce corner. Throwing brickbats does not equate discourse.
"I guess that means "no," you do not have examples of thriving Christian missions, replete with growing flocks, in Iraq"...
Hmmm, are you experiencing another delusional episode benjamin?
Why would I tell YOU of all people anything about what christians are doing?
Truly bizzare!
Well have the housing markets reached bottom?
Hmmm, if one windows shops so to speak in these U.S. Cities With The Most Underwater Mortgages
one could get an idea rather quickly I think...
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