This was a big day for economic reports and the Case Shiller Q4 report, the Consumer Confidence Index, and the FDIC Q4 report came out with not-so-surprising results. Since I am occasionally accused of cherry-picking negative data, I wish to point out that the following is a report and analysis of the data as it is with hyperlinks to the sources if you wish to see the original data yourself and try to squeeze good news out of them.
Case Shiller Housing Report
Here are typical news reports on housing:
For the fourth quarter, the S&P Case-Shiller U.S. National Home Price Index posted a 2.5% decrease from a year earlier, a significant easing from the 19%, 15% and 8.7% declines in the rest of 2009. It fell 1.1% sequentially but rose 0.3% adjusting for seasonal factors.
From Bloomberg:
Home prices in 20 U.S. cities rose in December for a seventh consecutive month, indicating the industry at the heart of the worst recession since the 1930s is stabilizing.
The S&P/Case-Shiller home-price index increased 0.3 percent from the prior month on a seasonally adjusted basis, more than anticipated and matching the gain in November, figures from the group showed today in New York. The gauge was down 3.1 percent from December 2008, the smallest decline since May 2007. …
“The rebound in the housing market since April seems to be related to” government efforts such as the homebuyer tax credit and the Fed’s purchase of mortgage-backed securities, Robert Shiller, who co-created the home-price index, said today in a Bloomberg Television interview. “A lot of people are coming in buying because they think the recession has just ended.”
Shiller’s comment makes a lot of sense. This is an artificially stimulated market to a great extent. While I believe that the prime driver is lower prices, when the government shuts down the home buyer tax incentives in April, the market will pick up the down trend for a while.
I was intrigued by a report from my co-reporter, Tyler Durden at Zero Hedge, who brilliantly noted a flattening in the improving rate of decline of housing prices … Continue reading It’s Supposed to Work Part II: Housing, Consumer Confidence, and Banks
