Article courtesy of CNBC
Real estate price data Tuesday should confirm that housing continued to stabilize this summer, even as the rest of the economy remained tepid.
The S&P/Case Shiller home price index is expected to be up one percent for July, when it is released at 9 a.m. ET. The FHFA home price index, released at 10 a.m., is expected to show a 0.7 percent gain in housing prices in July. The data follows on reports last week that showed housing sales were stronger than expected in August, rising 7.8 percent, and home builders sentiment jumped to a six-year high.
“It will probably be pretty strong, just because the mix is starting to work in their favor,” said Mesirow Financial chief economist Diane Swonk of the Case Shiller data. She said there were fewer foreclosures in July’s sales so the prices overall should be higher.
“We’re seeing more expensive houses in the mix, less distressed sales,” Swonk said. “Headlines have an impact on confidence.”
Deutsche Bank chief U.S. economist Joseph LaVorgna said homeowners’ equity is a key to household buying power, and he and other economists said the improvements could start to help consumer confidence and spending. The latest reading on consumer confidence is Tuesday at 9 a.m., and it is expected to rise to 65 in September, from 60.6 in August.
Moody’s Economy.com chief economist Mark Zandi said housing is one factor that affects confidence, but not the main one. “It’s jobs, it’s gasoline prices. Stock prices are important,” he said. ” I think on the margin it’s starting to help. I think people are feeling better about their home. They know at least it’s not falling in value, and that’s a big step forward.”
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