Recently, the media has been discussing the housing market in a negative light. However, Calculated Risk writer Bill McBride explains that it is all a matter of perspective.
The first mistake these writers make is they are asking the wrong question. Of course housing is lagging the recovery because of the residual effects of the housing bust and financial crisis (this lag was predicted on this blog and elsewhere for years – it should not be a surprise).
The correct question is: What’s right with housing? And there is plenty.
1) Existing home sales were down 7.5% year-over-year in March. Wait, isn’t that bad news? Nope – not if the decline is related to fewer distressed sales – and it is. (fewer foreclosures and short sales).
2) Mortgage delinquencies are down sharply. See: Fannie Mae and Freddie Mac: Mortgage Serious Delinquency rate declined in March and Mortgage Monitor: Mortgage delinquency rate in March lowest since October 2007, “Only One in 10 American Borrowers Underwater”
3) Mortgage credit is tight. Hey, isn’t that bad news? Nope. There is only one way to go …
Find out the other 6 Reasons at Calculated Risk
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