By Alessandra Malito
Home prices are going to go up in the United States.
They will be doing so slowly, though.
Last month the results of the Case Shiller 20-City Composites study, which serves as a measure of U.S. home prices, were disappointing, with a decline of 0.1 percent by the month. But economists resonated then, and still, with the findings that overall there was a year-over-year rise.
“I think the numbers are going to grow on a month-to-month basis,” Steven Ricchiuto, chief economist for Mizuho Securities, said. “Just on a slower rate.”
Moving slowly seems to be the framework in which Case Shiller has worked recently, and it also seems to be the way in which the housing economy has bounced back from the housing bubble that nearly depleted the market and put the country into a Great Depression-like state.
“The housing market certainly took a dip in the first quarter and I think that’s going to be reflected in the home price data,” Ricchiuto said. But, he said, “buyers will be buyers.”
That means people looking to buy homes may be a little disappointed, but homes will still be sought after.
“It’s a better opportunity now, but certainly no longer a steal,” Ricchiuto said.
Ryan Wang, an economist for HSBC, agreed the home prices will be going up and that they will do so cross the country. He said “The increase seems to be pretty broad-based geographically.”
He also said the average of home prices seem to make up about half since the decline during the housing bubble. And while it will go up, it will do so at a quiet rate.
“I do think the rise in home prices has sort of started to restrain,” Wang said. “It’s reduced affordability and that comination with the rise in mortgage rates has cooled off the pace of sales.”
And, Wang said, that cooling of sales has expanded into other markets far reaching into other markets.
“That has implications, for example, consumer purchases of housing related goods, like furniture, appliances, even auto sales,” Wang said.
That seems to sum up the economy.
“It’s just part and parcel of the same way of the economy,” Ricchiuto said. “Struggling to maintain momentum, it’s not getting any faster, not getting any slower.”