U.S. single-family home prices dipped modestly in April, pointing to signs of stabilization in the battered housing market at the start of the spring buying season, a closely watched survey said on Tuesday.
MIKE FEROLI, ECONOMIST, JP MORGAN, NEW YORK:
Within the seasonally adjusted number, there is cause for some optimism. Particularly the pace of decline seems to be slowing some, so that is good. We have to do that before you can actually start increasing. So consistent with some other indicators we have been seeing, it does look like the pace of decline slowing a little bit.
I would expect prices are flattish in the second half and it may be a while before we see positive growth of any significance. I would not be surprised to see a month where prices are up but it might take a while to see increases in housing prices that are really notable.
RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK:
It suggests that the housing market is stabilizing. It suggests that things are bottoming out and it is only a matter of months before you hit the bottom. Washington seems pretty strong and New York is pretty stable. Things aren't great but at least they are not completely falling apart.
MICHAEL WOOLFOLK, SENIOR CURRENCY STRATEGIST, BNY MELLON, NEW
Again, this is not particularly encouraging housing news. It is in line broadly with expectations, as we've not yet seen a bottom put into the housing market. However, one thing that we would note is that rental prices are on the rise. College graduates and new entrants to the labor force are renting rather than buying due to a lack of access to mortgage financing. That will put upward pressure on core inflation over the next six months and will have to over the course of the next year prompt some construction. So we anticipate a housing construction bottom in the summer and expect some positive numbers in the not-too-distant future.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON
While the seasonally adjusted trend is getting less negative, a 0.8% seasonally adjusted increase in the more volatile FHFA house price index released last week for April looks erratic. Price data released with May's existing home sales report suggests the improvement toward less negative may extend into the neutral or even marginally positive in May, while the S&P Case-Shiller's 10 city index, unchanged at -3.1% yr/yr, is a little less weak than its 20 city counterpart. Still, the housing market remains weak, with this data showing nothing more than tentative hints at stabilization. Looking at the individual cities, only Washington DC, with a 4.0% rise, is positive on a yr/yr basis, with Minneapolis at -11.1% being the weakest. Washington DC with a 2.0% seasonally adjusted rise also leads the month/month gains.