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5 Experts Shine Light on April Housing Numbers

It is our mission on this blog to give you the factual data behind the current housing headlines. We ask Steve Harney to give his insights in an attempt to bring clarity to what (at times) seems to be conflicting information, and there are moments where we reach out to industry specialists in order to provide a more focused aim on certain real estate trends or topics.  Today, we just wanted to give you five clear-cut insights from some of the top economic experts in our field that have recently shined some light on April’s housing numbers.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s:

The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices. In the past several months we have seen some relatively weak reports across many of the markets we cover…While year-over-year results for the National Composite, 18 of the 20 MSAs and the two Composites improved, the most recent monthly data are not as encouraging. It is especially disappointing that the improvement we saw in sales and starts in March did not find its way to home prices. Now that the tax incentive ended on April 30th, we don’t expect to see a boost in relative demand.

Lawrence Yun, National Association of Realtors’ chief economist:

The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, but other factors also are supporting the market. For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.

Naroff Economic Advisors:

The government incentives to buy homes worked, but who knows where we go from here. Existing home sales surged in April as the federal incentives to buy came to an end. This, of course was expected. We saw a similar pattern last fall when the first iteration of the home buyers’ incentive neared an end. This time, even though long time owner were added to the mix, the run up in sales was not nearly as dramatic. Indeed, the peak was about 10% lower.

Calculated Risk:

Months of supply increased to 8.4 months in April. A normal market has under 6 months of supply, so this is high – and probably excludes some substantial shadow inventory. And the months of supply will probably increase sharply this summer…The increase in inventory is the big story.

Omair Sharif, RBS:

The sharp rise in supply in April could reflect a faster rate of foreclosures making their way to REO status (i.e. banks took possession of a larger number of homes and immediately put them up for sale), or it may be that potential sellers, sensing firmer demand, are trying to get rid of their properties. In either case, the April jump in supply put the current level of existing homes for sale nearly 3% above the year-ago reading, underscoring that while demand may be steadying, the supply situation still poses a headwind to the nascent housing recovery.

How do you feel about what the experts had to say?

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