The Federal Housing Finance Agency reported today that home prices rose. My own work, using Radar Logic prices (they are real time and don't lag like Case/Shiller and others), has been indicating higher prices for some time. I have built a set of leading indicators based for the 25-MSA Composite and for several individual MSAs that are based on price momentum, transaction activity, and mortgage spreads to Treasurys. I have also shown in this blog and my Report on Real Estate that home prices lead the economy and do not wait for employment and incomes to rise.
From today's release from the FHFA --
U.S. home prices rose 0.9 percent on a seasonally-adjusted basis from April to May, according to the Federal Housing Finance Agency’s monthly House Price Index. The previously reported 0.1 percent decline in April was revised to a 0.3 percent decline. For the 12 months ending in May, U.S. prices fell 5.6 percent. The U.S. index is 10.7 percent below its April 2007 peak.
Below is the graph of what the FHFA is reporting --
As for my leading indicators, here is the chart for the 25 MSA Composite --
While most of the MSAs I cover are indicating buy signals, LA and MIA most of all, the New York market is still soft and the Manhattan Condo market is going to get softer still.