Where is the housing market headed? Have we reached the bottom yet? Is the housing bust over? Three reports will be released this week that may indicate which direction the housing market is headed. A newspaper article says that data from these reports will be focused on two parts of the housing market: Home Sales and Home Prices. And they don’t necessarily move in tandem. One may recover before the other one does.
February showed an increase in numbers of home sales – for both new construction and resales – and that trend is likely to continue. Foreclosures, record-low mortgage rates and the $8000 Tax Credit for 1st-time homebuyers have all contributed to an increase in the numbers of homes sold. The busier spring housing market will help that momentum also. Less likely to show an uptick are home prices. A report due out tomorrow will address that. Foreclosures may help home sales activity but they have a negative effect on home prices. If home prices have “bottomed-out” and a recovery is taking place – we may not know that for awhile. It takes time to go from looking for a home, signing a contract and then closing on that home. The article, Housing Data Could Signal If Bust Is Over was published April 20 in The Washington Post.