OFHEO: 2nd Quarter Home Prices Up 0.08% during Quarter, 3.2% from Year-Ago Quarter
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.
This report showed prices going up 3.2%. Last week, the S&P/Case-Schiller Index reported prices fell in Q2 by 3.2%. Methodology is a bit different, but it’s curious that results were so divergent.
Comment by Kurt Brouwer — August 30, 2007 @ 5:53 pm
[...] Also, Bizzy shows that the housing meltdown is also not as bad as advertised. They don’t make ‘em (recessions, that is) like they used to! [...]
Pingback by NixGuy.com » Update: Stocks Not Crashing — August 30, 2007 @ 8:32 pm
#1, “methodology is a bit different…..â€
Yeah, I’ll say. Case-Schiller looks at only 20 of the largest cities, and includes jumbo properties. The list of 20 doesn’t include Houston or Philly, but does include shrinking Cleveland and not-as-big-as-thought Vegas, whose metro area has fewer people than Cincinnati’s.
I’m pretty sure OFHEO includes jumbos, but more importantly, OFHEO looks at the entire country, even very small metro areas (their report is a huge PDF for a reason). OFHEO is, I believe, by far the most comprehensive report, even compared to NAR and some others, which partially explains why it takes two months to get it out.
I don’t think there’s any dispute that the OFHEO report is considered the best and last word on what has happened in the nation’s housing market, as well as individual housing markets, in a given quarter. Anyone else is more than welcome to disagree and point to why.
Comment by TBlumer — August 30, 2007 @ 11:24 pm
It’s a great economy – we’ll get though this blip in housing.
Comment by Donald Douglas — August 31, 2007 @ 1:05 am
This is why BizzyBlog is indispensible. I’m sure this report will be splashed all over the MSM this week – NOT!
If only the average American got the real news, we’d all be alot better off. We wouldn’t have to worry about the likes of a Clinton, Edwards, or Obama becoming president.
Comment by Joe C. — August 31, 2007 @ 6:16 am
#5, thx.
Comment by TBlumer — August 31, 2007 @ 7:13 am