July 29, 2009

Housing rebound includes speculators

Improved numbers in the U.S. housing market may not indicate more consumers are ready to begin buying homes again, an economist said.

Brad Hunter, chief economist at Metrostudy, told The Washington Post that buyers who took residence in homes purchased in the second quarter fell by 2.6 percent.

Investors are turning right around and putting the houses on the market for sale or for rent. What appears to have been an absorption of excess inventory can be just a changing of ownership of that inventory, Hunter said.

New data has many hopeful that the market has started to turn a corner.

The Standard & Poor's Case-Shiller home price index released Tuesday showed prices rose in 13 of 20 major metropolitan areas in May.

Mark Fleming, chief economist at First American CoreLogic, said the market had found a bottom.

But David Blitzer, Chairman of the Standard & Poor's Index Committee, warned the numbers that indicate declines are finally stabilizing, could be a false reading.

We likely do have a way to go before we see sustained home price appreciation, he said.