As
expected the long cycle decline is now over and liquidation is no
longer driving the market. As I posted in late 2008, no constructive
action would result in a five year work out in which mortgages would
be resolved as they came due or went into market driven voluntary
liquidation. That was the worst way to handle the credit crisis and
it led directly to a sharp reduction in the number of potential
borrowers which stalled the recovery.
There
was a fix, but we did not go there. Today we have a weak market
slowly rebuilding. This will take time, but expect the building
component to lead as they are making deals work.
This
will in time be understood as the administration's greatest failure.
Yet today, few understand that it can be fixed even now. At least it
would be a lot cheaper though a lot less profitable as there are no
customers to rescue.
What
ever the result, the USA is the beneficiary of ample cheap housing
although that certainly was nobody's plan.
CASE-SHILLER: HOUSE PRICES RISE 3% FROM LAST YEAR
UPDATE:
Case-Shiller is
right in line.
The widely followed
house price index showed prices rising 3.0% year-over year, just a
tad ahead off expectations of 2.95%.
ORIGINAL POST: The
gold standard of housing indices comes out at 9:00 AM.
Nomura has the quick
preview:
US Case-Shiller home
price index (9:00 EDT): We expect the Case-Shiller 20-city home price
index to show a 3.6% y-o-y increase in September as price gains
continue to spread across the country (Consensus: 2.98%, previous:
2.03%). An increasing number of major cities each month are now
experiencing year-on-year price gains – 17 in August compared with
three in January.
The housing rebound is
unquestionably one of the most important economic stories in the US
and in fact in the world.
We'll be covering the
number here LIVE.
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