This is the very first evidence I have seen that we might be near the bottom in housing.
No, not the chart above — this:
It’s Going to Get Worse
Economist David Lereah was once the housing market’s biggest cheerleader. Now he says the bust isn’t near over, and home prices still have a long way to fall.
"We’re not at the bottom," he says. "[People] want it to be near the bottom, but we’re not there yet. The leading indicators are still very bad. Pending home sales are still in bad shape. Mortgage applications are low … There’s still supply out there in abundance … This thing is going to get worse before it gets better."
Lereah says that the industry may begin to see a slight uptick in sales later this summer, which could signal the start of the recovery. Home prices, however, will continue to fall. According to the latest numbers from the Case-Shiller index, the average U.S. home has lost around 15 percent of its value since the market’s peak. "We’re probably going to end up with a 20 percent [decline], but if I’m wrong it will be even more than that," he says.
I’d call that capitulation — tho its only one person.
Oh wait — there’s this: "So even if this slump remains far from over, David Lereah still thinks it may be a smart time to buy." That suggest no bottom in sight.
Oh Yeah, that’s the good stuff . . .
It’s Going to Get Worse
Newsweek, May 6, 2008 | Updated: 11:15 a.m. ET May 6, 2008
Gloom in the Housing Market Persists
Northern Trust Global Economic Research, May 7, 2008
U.S. Home Slump Puts Owners Under
Water, Zillow Says http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akLd6UL0v004
Unlike the Federal Reserve, Trichet and the EC are very concerned with high Inflation:
Remember, the EC has a single charge — maintaining price stability — and is not concerned with maximizing growth . . .
Trichet Sees `Rather Protracted’ High Inflation
Gabi Thesing and Christian Vits
Bloomberg, May 8 2008
Yesterday, I wrote: “David Leonhardt’s NYT columns are oftentimes insightful and illuminating. Unfortunately, today’s column is not one of those times . . .” I promised readers (and David) an explanation. Consider this it. First off, I interpreted Leonhardt’s column as really two distinct issues — one psychological, one statistical. He got the first one…Read More
Click for Video
Federal Reserve Chairman Ben S.
Bernanke, seeking to end the worst housing slump in 25 years,
urged the government and mortgage lenders to intensify their
efforts to avoid home foreclosures.
Bernanke, in a speech in New York today, also reiterated his
call for lenders to forgive portions of mortgages for some
struggling homeowners. He said proposals should be “tightly
targeted” at borrowers at greatest risk of losing their
properties, and avoid providing an incentive for defaults.
The Fed chief also backed the idea of having the Federal
Housing Administration refinance troubled mortgages, a concept
included in Democratic legislation in Congress, without
explicitly endorsing the bill. His remarks indicate a gap with
the Bush administration, which has preferred to rely on industry-
"Realistic public- and private-sector policies must take
into account the fact that traditional foreclosure-avoidance
strategies may not always work well in the current environment,”
Bernanke said in remarks to a Columbia Business School dinner.
Bernanke Urges Action to Avert Further Foreclosures
Scott Lanman and Alison Vekshin
Bloomberg, May 5 2008