(Source: Washington Post)

Economy-watchers are searching for evidence that the housing market is starting to hit bottom. And in recent months, there has been some evidence that the end of the great housing bust may be near.

This week offers a reality check, with three key pieces of housing-related data coming out. But to interpret the data, it helps to realize that the end of the housing bust means different things, and could come at different times, depending on what data you consider.

Home sales will likely hit a bottom first — and may have already done so.

The prospects are less promising for home prices, a report on which is set to come out Wednesday. Analysts expect the Federal Housing Finance Agency’s price index to have fallen 0.6 percent. The new wave of foreclosures may help home sales activity but is likely to keep driving home prices down.

Time lags are another issue. Even if low rates and tax credits bring buyers back into the market, it could take months for that increased demand to meaningfully affect prices, simply because of the time it takes a person to go from deciding it’s time to shop again to actually closing on a house.

Read the full article “Housing Data Could Signal If Bust Is Over” in the Washington Post (April 20, 2009).

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