After 4 Years, Housing Market Still Frail
STEVE INSKEEP, host:
Depending on how you look at it, the housing market can look better or still not so great. If you consider the block where Ari Shapiro and I both happen to live, two houses have recently sold, though they had to cut the price a little bit - so mixed messages there. And there are mixed messages in the economic numbers, as well.
NPR's Chris Arnold reports.
CHRIS ARNOLD: The latest numbers show a housing show a housing market that's starting to heal, but that's still fragile. Existing home sales in December fell by about 17 percent from the month before. That sounds like a lot, but the first-time homebuyer tax credit boosted sales in prior months so it's not too surprising that the pace of sales has cooled off a bit since then.
Professor KARL CASE (Economics, Wellesley College): It's down but it's still in a very good level relative to what it was before. That means we're selling a fair number of houses. The second thing is that prices seem to have stabilized.
ARNOLD: Karl Case is a housing economist at Wellesley College. He helped to create the S&P Case-Shiller Home Price Index that tracks home prices across 20 metro areas.
Professor CASE: If you look at the numbers for the 20 cities they do seem to have reached what might be a bottom.
ARNOLD: So Case says that's encouraging, but this is all in the midst of massive government support for the housing market.
Mark Zandi is chief economist of Moody's Economy.com.
Mr. MARK ZANDI (Chief Economist, Moody's Economy.com): The housing crash has been ongoing now for four years. I suspect weve got another 6-12 months to go and that does require that policymakers continue to be aggressive in trying to support the housing market.
ARNOLD: Zandi says the government needs to keep interest rates low and expand efforts to prevent foreclosures or, he says, that housing could start to drag the entire economy down again.
Chris Arnold, NPR News.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.