{"id":31479,"date":"2012-08-08T18:22:41","date_gmt":"2012-08-08T18:22:41","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/08\/another-reason-to-stay-bullish-a-bottom-in-home-prices\/"},"modified":"2012-08-08T18:34:27","modified_gmt":"2012-08-08T18:34:27","slug":"another-reason-to-stay-bullish-a-bottom-in-home-prices","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/08\/08\/another-reason-to-stay-bullish-a-bottom-in-home-prices\/","title":{"rendered":"Another Reason to Stay Bullish: A Bottom in Home Prices"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

Over the past couple of weeks, I\u2019ve encouraged readers to look beyond the negative headlines \u2013 and heated political rhetoric from both major political parties \u2013 and remain optimistic on the outlook for high-quality stocks.<\/p>\n

You\u2019ve already heard the national media report all the negatives ad nauseam: weak economic growth, high unemployment, runaway deficit spending and continuing troubles in the Eurozone.<\/p>\n

But few seem to recognize the many positives that also exist: low inflation and interest rates, declining energy prices, expanding opportunities in emerging markets, low valuations and record corporate profits.<\/p>\n

To this list, it\u2019s also time to add another positive. According to S&P\/Case-Shiller and the real estate website Zillow, U.S. home prices are at or near a bottom. That\u2019s a very good thing. Here\u2019s why\u2026<\/p>\n

Declining home prices have been a dark cloud over the economy and the stock market for roughly six years now. Having temporarily taken leave of their senses, home buyers bought into the mantra that \u201creal estate always goes up\u201d and drove prices up to the cirrus clouds.<\/p>\n

It was bound to end badly and the ensuing adjustment has been painful. A home is most consumers\u2019 biggest purchase. And the drop in prices didn\u2019t just reduce or eliminate their home equity for millions. In many cases, it demolished household net worth. That, in turn, crushes consumer confidence.<\/p>\n

So a bottom in home prices is a huge plus. And that appears to be what we\u2019re seeing now. As Zillow Chief Economist Stan Humphries said last week, \u201cAfter four months with rising home values and increasingly positive forecast data, it seems clear that the country has hit a bottom in home values. The housing recovery is holding together despite lower-than-expected job growth.\u201d<\/p>\n

Indeed, many homebuyers feel like they can\u2019t hold off any longer, either because prices are so low or because their personal need for new housing is so high.<\/p>\n

In the second quarter, values rose in 53 of the 167 markets covered in Zillow\u2019s Real Estate Market Reports. And some gains were substantial. Home prices rose 12.1% in Phoenix, for example.<\/p>\n

Similarly, the S&P\/Case-Shiller 20-city composite index rose in the month of April, with 19 out of 20 cities posting gains during the month. Then, last Tuesday we learned the index rose 2.2% in May, marking two consecutive months of gains.<\/p>\n

\"Another<\/p>\n

This doesn\u2019t mean that home prices are set to rocket higher, of course. There are still millions of foreclosures looming \u2013 and these fire sales will keep a lid on prices. Yet Zillow reported this week that only 5.8 out of every 10,000 homes were lost to foreclosure in June, down from 7.9 of every 10,000 homes in January.<\/p>\n

With the economy soft and many foreclosures still working their way through the system, it will be quite a while before we see robust growth in home prices again.<\/p>\n

But a housing bottom is a necessary first step. And another reason to remain bullish on both the U.S. economy and U.S. share prices.<\/p>\n

Good Investing,<\/p>\n

Alex<\/strong><\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U Over the past couple of weeks, I\u2019ve encouraged readers to look beyond the negative headlines \u2013 and heated political rhetoric from both major political parties \u2013 and remain optimistic on the outlook for high-quality stocks. You\u2019ve already heard the national media report all the negatives ad nauseam: weak economic growth, high … <\/p>\n

Continue reading “Another Reason to Stay Bullish: A Bottom in Home Prices”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31479","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=31479"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/31479\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=31479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=31479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=31479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}