Instant View: Housing prices up in January

NEW YORK (BestGrowthStock) – Prices of U.S. single-family homes rose in January for the eighth straight month and the annual rate moved the closest it has been to an increase in three years, Standard & Poor’s/Case Shiller home price indexes showed on Tuesday.

COMMENTS:

DAVID SLOAN, ECONOMIST, 4CAST LTD, NEW YORK:

“The year-on-year rate of -0.7 percent was pretty much as the market expected, but if you look at the seasonally adjusted 20-city index we have got a 0.3 percent increase that is similar to the December increase. It looks like there is an underlying recovery in house prices going on. The numbers are in line with market expectations and a bit stronger than my expectations and I would say, broadly speaking, this is quite encouraging for the housing market.”

PIERRE ELLIS, SENIOR GLOBAL ECONOMIST, DECISION ECONOMICS INC.,

NEW YORK

“They could have been a lot worse with home sales down so much after rising in the fall on the first-time homeowner tax credit. It’s showing steady improvement on a year-over-year basis.

“Whether housing market stability remains to be seen without government incentives. Surely we are bumping along the bottom. Healing is happening but it’s happening very slowly.

“The big issue is what will happen to long-term mortgage rates as the Fed exists the market. Long-term rates have already been creeping up. Hopefully what has happened is already the worst.”

GARY SHILLING, PRESIDENT, A. GARY SHILLING & CO IN SPRINGFIELD,

NEW JERSEY:

“It’s not surprising to me because there’s such a huge, huge overhang over inventories. We have 2.3 million extra housing units above normal working levels. That’s a lot, considering long-term we build about 1.5 million per year. What has held up the crushing effects of these inventories is the impact of moratorium of foreclosures because of government-required attempts to modify mortgages to keep people in houses.”

MARKET REACTION: STOCKS: U.S. stock index futures gained marginally. BONDS: U.S. Treasury debt prices stemmed losses slightly. DOLLAR: U.S. dollar held losses.

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Instant View: Housing prices up in January