Glimmers of Hope on Housing?
The Case-Shiller housing index saw a slight rise in housing prices last quarter. It wasn't a lot, but it's enough to spark some welcome optimism:
You could peer into this data and see troubling things, too: The tax credit that's currently spurring buyers into the market is expiring soon. A lot of the movement comes from first-time buyers who think the market is hitting bottom, and they probably won't continue. So this could reverse. Calculated Risk runs down some other reasons for pessimism.
But I come down more with Krugman's take, which is less that we're seeing a false dawn than a new normal. "At this point, squinting hard at various measures suggests that housing prices are still a bit high, but we’re within debating range. Home prices could stabilize not too far from here," he says. "But even if the big bust is over, that doesn’t mean we’ll see a rebound; at best, this is the new normal. 2005 isn’t coming back."
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