The FHFA Home Price Index was released this morning and showed an increase of +0.7%, the second straight month of +0.7% growth.
But if we compare the FNC 20 City Home Price Index, we can see the FHFA index (white) seems more “optimistic” than the FNC 20 City Index (orange). That is, they tell a different tale about how housing prices have declined.
If we compare the FHFA index to the Case-Shiller 20 Metro Home Price Index, we see that the Case-Shiller index peaked first and fell faster than the FHFA index.
Here is the FNC 20 versus Case-Shiller 20. Very similar, but Case-Shiller showed an earlier peak than either FNC 20 or FHFA.
Of course, the housing bubble wasn’t helped by soaring oil prices in 2007 and 2008 (particularly in the newer construction areas of Florida, Arizona, Nevada and California).
Oil per barrel has risen from $31.41 per barrel on 12/22/08 to $106.21 today (02/23/12). Let’s hope oil doesn’t help kill the housing market … again.
Buddy Rojek
February 23, 2012 at 2:39 pm
It appears that the run up in Gold, Commodities (Oil especially) is a reflection of the declining worth of the dollar. With ultra low interest rates, why wouldn’t you invest in commodities as a store of value. I mean at the end of the day we used to exert physical effort, or used saved capital for commodities (Food, clothing, shelter, a new spear, perhaps buy a wife with dowry payments).
Paper just smoothed out the bartering system, but used to be backed by physical gold. Now we don’t back it with gold, the Central Bank can print as much as it likes, give to its Bankers at low rates, and they buy these commodities as quickly as possible. You pay higher prices at the pump. The Bank effectively stole from you because your dollars you saved last year working your guts out, buy less oil.
With improvements in technology, you can effectively create Bartering Credits. But this would be non-legal tender! But Bartering is not illegal, so I say sell a shipment of grain for a tanker of oil, then sell the tanker of oil for a new tractor, the oil company lined up with John Deere. It is a roundabout way but is possible.