Home prices are expected to drop at a slower rate for the second month in a row, a sign of a new, if faint, stabilization in the housing market.
Standard & Poor’s Case-Shiller home-price indices for February will be released tomorrow with an estimated 3.4 percent year-over-year drop average according to 31 economists surveyed by Bloomberg. This will be the 10th consecutive month of decline. December and January saw a 4.1 percent and 3.8 percent drop, respectively.
On a monthly basis, prices are expected to drop by 0.8 percent, the same that was seen in January. Home prices are still off by over 30 percent from the highs seen in June 2006.
Even while other parts of the economy like the stock market are sending mixed signals to consumers, the housing market is seen as steady, according to Sean Incremona, a senior economist at 4Cast Inc.
“Prices and supply and demand are coming in line,” Incremona said. “It’s not prices anymore, its whether or not you or going to have job.”
A survey by Fannie Mae found almost three-quarters of Americans thought it was a good time to buy a home in March. The same survey found 14 percent of American thought it was a good time to sell a home.
While the prices are still in decline, its an improvement from February 2011, when prices had started a double dip and the chairman of the Index Committee at S&P Indices, David M. Blitzer said “there is very little, if any, good news about housing.”
Contrast that to Ben Bernanke last week when he said that there was a “slight bit of encouraging news here and there in the housing market,” a statement that comes as close to an endorsement from the abstemious Federal Reserve Chairman.
The threat of rising interest rates and middling job employment figures still looms. While the economy has faltered in the last few weeks, the Case-Shiller data lags almost two months and so any bad news in April would not show up until the end of June.
But increased sales, reduced inventory and improved consumer confidence are positive signs the housing market has had this year. A few months of flat prices, however, are needed before a turn around, according to Nathaniel Karp, a BBVA Compass Bank economist
“Right now it doesn’t look like we reached that level,” Karp said. “But were very close to that bottom, for sure.”