The latest reports on home sales and prices offer a complicated and conflicted picture. But when the data are taken together, one thing is clear: Weighing risk and reward, it's worth waiting a few months to see which way the real estate winds are really blowing.
Technically, the homebuilder sentiment index inched one point higher to 16 in November. But the gain was offset by a revised one-point dip in October's reading, and the numbers remain well below those seen during a healthy housing market.
Pending home sales in the U.S. unexpectedly fell 1.8% in September, the National Association of Realtors reported Friday. It was the statistic's first decline in three months, and one that suggests that the housing sector's recovery is likely to remain uneven through at least early 2011.
Home prices in 20 major U.S. cities rose a better than expected 0.6% in July compared to June, according to the S&P/Case-Shiller Home Price survey. However, year-over-year gains slowed, suggesting a slowdown in the nation's economic recovery.
U.S. pending home sales unexpectedly rose 5.2% in July -- a rise that may be a sign of housing sector stabilization, or it may merely reflect an elongated impact of the home buyer tax credit, due to an extended closing deadline.
This week, David Cay Johnston published a thought experiment titled How Would You Invest $1 Billion Under the Current Tax System? Its premise is that if we use tax policy to boost demand, we can find more profitable ways to invest. It's a premise DailyFinance columnist and venture capitalist Peter Cohen rejects.
Home prices in 20 major U.S. cities rose a better-than-expected 1% in June from May, according to the Case-Shiller index. But the home buyer tax credit probably helped lift June's data, while home sales in July have tumbled.
July housing starts inched up to 546,000, a lower-than-expected rate that's a gain on June only because the previous month's total was revised downwards. Housing starts are now 7% lower in the past year, despite the home buyer tax-credit program.
The U.S. housing sector took another hit this month as homebuilder sentiment unexpectedly fell to 13 in August from 14 in July. The measure has been drifting lower since the federal homebuyers tax credit expired this spring.
The Federal Reserve's latest Beige Book data confirms what other recent economic reports have suggested: The U.S. economic recovery slowed somewhat in the second quarter, with some regions reporting stalled conditions.
Home prices in 20 major U.S. cities rose a better-than-expected 0.5% in May, Case-Shiller said Tuesday. However, analysts warn that it's probably too early to celebrate, as the housing market has a long and difficult road ahead of it.
New-home sales leaped in June by 23.6% from May, to a 330,000 annual rate, but that was aided by a downward revision to May's 47-year-low, to a 267,000 annual rate from the previous 300,000. Inventories fell, but there, too, the news is mixed.
The U.S. real estate market recorded another setback in July: The National Association of Home Builders reported that its Housing Market Index fell to 14 from 16 in June, with builder confidence waning and sales dipping after the expiration of the federal home-buyers tax credit.
Aided by the home buyer tax credit, U.S. existing home sales jumped an unexpectedly large 7.6% in April. But is the real estate market strong enough to stand on its own now that the federal incentive has ended?
