Economist's Commentary: July 22, 2008

Quick Take on the Economy: July 22, 2008

By Lawrence Yun, NAR Chief Economist

Home price measurement from OFHEO, a U.S. government agency, showed a decline of 0.3 percent in May. It is less of a decline than in recent prior months.
From a year ago, prices are down 4.8 percent.
The Pacific region showed a surprising gain of 0.3 percent. This region, due to California, has been hammered from rising foreclosures. However, Realtor® and MLS reports of higher home sales from improved affordability conditions are, perhaps, beginning to stabilize home prices. Despite the gain, prices were still down 14.5 percent from a year ago in this hard-hit region.
The biggest monthly decline was in the West South Central region, which covers Texas, Oklahoma, Louisiana, and Arkansas. The decline of 1.0 percent is surprising given the relative healthy job market in this region.
The data period covers May. This Thursday, NAR reports on median price in June.

Home price decline is lessening. The price increase in the Pacific region was encouraging in that, possibly, the worst may be over in the hardest hit region.
Many consumers generally buy when the market is on the way up rather than down. Few more months of price stabilization signs, therefore, could induce more buyers into the market.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

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