Tuesday, June 28, 2011

Housing Market

Case-Shiller index for home prices in 20 metropolitan areas just came in for April and declined less sharply than the median forecast of economists surveyed by Bloomberg (in seasonally adjusted terms). It actually rose in not seasonally adjusted terms. Is the housing market stabilizing? Given that your house is typically the biggest item on your balance sheet I see a stabilization in the housing market as a necessary condition for consumer confidence and aggregate demand returning.