Last Tuesday another housing market obstacle appeared in the form of Standard & Poor's Case-Shiller Home Price Index for March.
Prices for 20 major metro areas dropped 0.8% for the month and were down 3.6% from a year ago. These numbers had some folks claiming the double dip in housing prices had arrived.
But Case-Shiller's longer term data reveals that in their 20 measured metros, home prices are still UP 38.2% since January 2000. This shows that in real estate, you have to look at the long term picture, just like you do with your 401K. You can see a chart of the info here:
National average home prices are also misleading. First, the national average rarely matches the price situation in a specific local housing market. Beyond that, distressed sales at substantial discounts make up a portion of that national average price.
In fact, when distressed sales are excluded, home prices are off just 0.5% year-over-year in April, according to data aggregator CoreLogic. If that's a double dip, you'd need a magnifying glass to see it. Finally, the Mortgage Bankers Association reported purchase loan demand unchanged from the prior week and up 7.6% from a year ago.
But MBA researchers do expect mortgage rates to rise the last three months of this year and continue to increase gradually through 2012.
From my weekly enewsletter for real estate pros, INSIDE LENDING, for the week of June 6, 2011
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