When the media need some good news, all it takes is one data point:
March 24 (Bloomberg) — U.S. home prices fell 6.3 percent in January from a year earlier, the smallest decline in five months, as lower mortgage rates began to spur demand.
The decline was led by a 21 percent drop in the region that includes California, the biggest U.S. state, the Federal Housing Finance Agency in Washington said today. The monthly house price index is down 9.6 percent from its peak in April 2007.
The pace of home-price declines is slowing as cheaper financing lured buyers and helped offset foreclosure sales. A wave of refinancing is likely to boost home-loan originations by $800 billion to $2.78 trillion, the Mortgage Bankers Association said today. Refinancing will total $1.96 trillion in 2009 and purchase originations will increase to $821 billion, the group said, as the Federal Reserve buys mortgage-backed securities.
“The effect of having the Fed bid in the market for a sustained period is enough to create a refinance incentive for a tremendous number of homeowners,” said Jay Brinkmann, MBA’s chief economist and senior vice president. “The vast majority mortgages originated before the latter part of 2008 are probably going to have at least a 50 basis point refinance incentive for at least the next several months, with mortgage rates hitting lows not seen since the early 1950s and late 1940s.”
All that refinancing is nice, but unlikely to affect house prices. A slower decline would be nice, but it’s hard to prove anything with just one data point.
Here’s the happy graph:
The current state of the economy and the housing market will continue to put downward pressure on prices- this is not a bottom, and it takes more than one data point to define a trend. Remember too that this is based on data from conforming mortgage. This wil not reflect what is happening in the jumbo market.
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I love NAR spin.
The plague only claimed 450,000 lives this month, as opposed to 510,000 (revised upwards) last month. This indicates that our new placebo vaccine is a complete success, and that we have eradicated all cases of the disease.
Only the negative, biased, uneducated blogger types would bring up the thought that the number is lower simply because there are fewer people to get sick, or that the number will be revised upwards next month like it has been every month for the last few years.