This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

New Housing Data May Signal A Passing Opportunity

The latest housing information indicates that home prices have continued to make a slow and steady recovery. That's good news for the economy in general, and specifically could help homeowners and depositors in savings accounts. However, it should be a call to action for potential home buyers, who otherwise could miss a rare opportunity.

The S&P/Case-Shiller Home Price Index rose in July, according to figures released on September 25. It's too early to call this a rally, but then again, an orderly recovery in the housing market may be better than a return to the runaway increases of the housing boom.

Healthier than people think?

Overall, the housing market may be healthier than many realize. The S&P/Case-Shiller Home Price Index has now increased for six consecutive months. Certainly, prices are nowhere near back to where they were during the peak of the housing boom, but that may be an unrealistic -- and unhealthy -- target.

Looking longer term, the S&P/Case-Shiller Index is up about 40 percent from where it was in January of 2000. So, if you look at the housing boom as an aberration, what you see is that housing prices have still made solid gains over the long run. Ultimately, modest price increases are much healthier for the housing market than a steep hike in prices, which can freeze many potential buyers out of the market and cause some actual buyers to get in over their heads.

Action at the low end

The New York Times reported last week that recent progress in the housing market is primarily at the low end. Prices in the lowest tier of the housing market are rising faster than those for mid-priced or expensive homes. This too is a sign of health: The lower end represents a much broader base of homeowners than the middle or upper tiers of the market. That signals wider support for the housing market, and for the economy as a whole.

A fleeting opportunity

Good news for the economy might even translate into good news for savings accounts and other deposits, which have seen interest rates driven down to near zero by weak loan demand and Federal Reserve intervention.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs