ALEX CHADWICK, Host:
MARKETPLACE's Sam Eaton joins us. Sam, just define the housing market for us now. It is not good.
SAM EATON: And then there was yesterday's report from the National Association of Realtors that sales of existing homes - or homes that people have already lived in - saw their largest monthly drop since the last major real estate bust in 1989. And then you throw in the subprime lending fiasco and the expected increase in foreclosures over the next year - year or two - and things start looking pretty bleak.
CHADWICK: But housing is such a big part of the economy, or at least we hear it is. Wall Street seems to shrug this off.
EATON: Yeah. Well, like, you know, the big news today is the strong corporate earnings. And as you're saying, people and businesses are still buying lots of stuff, despite the troubled housing market. And some would even argue that that laundry list of bad news for housing I was just talking about is actually good news. It just depends on how you look at the numbers. I talked to University of Maryland economist Peter Morici, and he says to the two housing reports emphasized the number of homes sold. And he says as a barometer of the market, the number of sales doesn't really matter as much as what homes are selling for.
PETER MORICI: It's very important to focus on the price of homes. When we look at the stock market, we don't ask how many shares have been sold each day. We look at the price of the shares - likewise, if housing prices are holding up very well.
EATON: So Morici says the average price of an existing home actually rose by about $6,000 between January and March. And for new houses, that price is up about $19,000.
CHADWICK: Well, let me go back to the first question I asked you. Where are we with the housing market at this point? I mean, is the bottom here? Is the bottom in sight? What is it?
EATON: And in many areas, you have delinquent mortgage payments on the rise, which is a precursor to more foreclosures. The bottom line is that there's no unified national trend. I mean, you look at Seattle or Houston or New York, things are hot. In places like Detroit where the manufacturing base is struggling, things aren't looking so good.
CHADWICK: Sam Eaton of public radio's daily business show MARKETPLACE, produced by American Public Media. Thank you, Sam.
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