The latest Office of Federal Housing Enterprise Oversight (OFHEO; ofheo.gov) report for the second quarter of 2007 is out (very big PDF). It shows that nationwide home prices increased a puny 0.08% in the second quarter, and that they are up 3.19% nationwide from the second quarter of 2006.

Bubble, schmubble. For a bubble to exist, prices as a whole have to be going down — a lot. They’re not even, again as a whole, going down at all.

The second quarter’s 3.19% year-over-year (12-month) appreciation is greater than inflation during the same period of 2.7% (the result of dividing the CPI-U of 208.352 for June 2007 by 202.9 as of June 2006; go to the very bottom at this link). That 3.19% is higher than the following previous year-over-years since 1993 (see page 5 of the report):

• 1997Q2 - 3.00%; 1997Q1 - 2.29%
• 1996Q4 - 2.61%; 1996Q3 - 2.53%
• 1995Q2 - 2.16%; 1995Q1 - 0.74% (!)
• All four quarters in 1994 - 2.71%, 2.20%, 1.86%, and 0.84% (!)
• All four quarters in 1993 - 1.06%, 2.13%, 1.71%, and 2.08%

Most of the above appreciation figures from 1993-1997 trailed inflation. From the same inflation link: December-to-December inflation was 2.7%, 2.7%, 2.5%, 3.3%, and 1.7% in 1993 through 1997, respectively. Some of these appreciation percentages trailed inflation by well over a point, in a couple cases by almost two.

Additionally, 2007’s admittedly tiny single-quarter nationwide appreciation of 0.08% during the second quarter is indeed the lowest since early 1994 — which was negative (-0.23%), as was the first quarter of 1993 (-0.11%).

The point of bringing up smaller numbers from the past is to get to this question: How many times during 1993 - 1997 did you hear about a nationwide housing “bubble,” “crisis,” or “meltdown”? So why are still-better numbers than we saw during those years leading to those characterizations?

That isn’t to deny that there aren’t some serious issues to deal with, but the bubble-crisis-meltdown talk in the face of numbers that are on the whole still positive makes me think that there are a lot of people who would like to succeed in talking the economy down, and are trying to capitalize on the housing-market situation to do just that.

That’s REALLY More Like It.

Here are excerpts from the BEA press release (bold is mine):

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.0 percent in the second quarter of 2007, according to preliminary estimates released by the Bureau of Economic Analysis.

….. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, exports, nonresidential structures, federal government spending, state and local government spending, and equipment and software that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP growth in the second quarter primarily reflected a downturn in imports, upturns in federal government spending and in private inventory investment, accelerations in exports and in nonresidential structures, and a smaller decrease in residential fixed investment that were partly offset by a notable deceleration in PCE.

The real change in private inventories added 0.21 percentage point to the second-quarter change in real GDP, after subtracting 0.65 percentage point from the first-quarter change.

The bolded items appear to reflect at least a bit of the inventory bounceback I was hoping for after last month’s 3.4% announcement.

Larry Kudlow’s clan almost called it two weeks ago:

Economists David Malpass and John Ryding at Bear Stearns believe second-quarter GDP will be revised up from 3.4 percent to over 4 percent.

Well, they don’t have the “over” part in place yet. But one revision remains.

Keep in mind that the overall economy grew at 4% during the second quarter despite the residential construction drag (down 11.6% on an annualized basis during the quarter). It’s not unreasonable to characterize the rest of the economy as “on fire.” Nonresidential construction (up 27.7%) is going bananas, and I have heard real-world anecdotes to back that up.

From Brampton, Ontario, Canada:

With a smile and a huge slab of cake, 10-year-old Taylor Nicole Webb finally got to meet the heroes who tickled her feet and saved her life.

Taylor was just three weeks old in January 1997 when she stopped breathing and a 911 call for help by her mom Lori Ottaviano brought four Brampton firefighters into their lives.

Capt. Bert Jeffries, and firefighters Luis Emibio, Dan Rowland and Brian Drake, who retired three years ago, worked together to revive Taylor and kept her alert until Peel medics arrived on scene to apply their expertise to keep the tiny heart beating on its own.

With a red firefighter’s helmet and a white icing cake saying “A special thanks to my heroes,” Taylor offered her thanks in the shy way a kid would, but her mom shed tears, emotional as she recalled what could have been if the four didn’t answer the call.

‘VERY REWARDING’

“I just wanted you guys to meet Taylor,” Ottaviano told Jeffries, Rowland and Emibio. “This is a living, breathing example of what you guys do on a regular basis and I can’t thank you enough.”

“Anytime we can save a life, it’s very special, very rewarding.” Jeffries said.

“It’s nice to see you smiling,” he said to Taylor.

He said it was the first time in his 29 years on the job someone sought him out to say thanks. “That I enjoy very much,” Jeffries said.

Go here for the rest of the story.