New pricing data come out on the housing market today and on a month over month (May to June) basis it was positive. This was true for the previous period (April to May) as well. The increase was not overwhelming but reasonably strong, but it is hard to get to excited when the latent supply (additional foreclosures, under water homes,.).
What I found interesting was the breadth of the rise. Nearly all the sub components rose as well even place where the foreclosure situation is a mess. (What does this tell you about that factor as a driver?….)
A friend asked a question related to the degree to which I though this was driven by the first time buyer tax credit and what would happen to demand when that went away. Without doing too much investigation my response was if it is all first time home buyers (which I can’t find the data but I’m told that they are heavy participants) then the ‘homeowner’ pool is getting bigger. This is because people who were not in the owner category shifted to it and the seller will likely look for another house (stay in the owner category). Although I expect this ‘owner’ group stickiness to be less true than is normal because of the compositions of sales (ala foreclosures).
That said the home price index is incredible correlated with mortgage credit and where that goes I expect housing prices to go; so did the tax credit matter, sure for someone somewhere; did it fix the housing market? no, the credit markets really broke the housing market and are now trying to put it back together, we will all see if they succeed.
