NEW YORK (MainStreet) -- The U.S. housing market is withering again (if it ever really achieved any kind of stability), and it’s no coincidence that this new decline is occurring at a time when the business headlines are dominated by terms like “historic downgrade”, “massive debt” and “stock market crash”.
Is it really coincidence, as politicians in Washington, D.C. would dearly hope the public believes? Or is the housing market now tied to the plummeting stock market and the bleak U.S. government debt picture?
Most likely, it’s the latter. Housing prices are ultimately tied to consumer confidence, and there’s not a lot of that going around these days. According to the Thomson Reuters/University of Michigan survey of consumer sentiment, July’s number was the lowest in two years – and that was before Standard & Poor’s downgraded U.S. debt, and before the stock market collapsed.
The most recent data certainly seems to tie the current economic and market malaise to lower U.S. home prices, as the latest quarterly report from the National Association of Realtors says. Data from the NAR shows that only 27% of U.S. metropolitan areas experienced home price gains, while home values from each state dropped a collective 5.4% for the quarter, the NAR reports.All in all, national median single-family home prices stood at $171,900, down 2.8% from $176,800 in the second quarter of 2010.
The NAR tries to put its best spin on the numbers: “Median home prices have been moving up and down in a relatively narrow range in many markets, which shows a stabilization trend,” says Lawrence Yun, NAR’s chief economist “Markets showing consistent price stability or increases are those with solid labor market conditions, such as in Washington, D.C.; San Antonio; or Fargo, N.D.”
But are the numbers in Washington, D.C. – a city that has been a model of stability during the housing crisis thanks to the steady flow of government jobs – all that stable today? Not really, at least on a month-to-month basis, says the Realestate Business Intelligence (RBI) Pending Home Sales Index.