In addition to revealing he has a debate about “[w]hat’s fair and unfair” by himself “at 10 o’clock at night,” in regards to banks and the government, Bank of America Corporation (NYSE: BAC) CEO, Brian Moynihan, called the U.S. housing market “fairly stable” on Wednesday at a Wall Street Journal event. The paper provided coverage of his remarks.
The housing market, in Moynihan’s opinion, should not be evaluated based on the refinancing market, but through home sales. The housing market has been a key indicator for those watching the economic recovery since the recession, and as a result, many groups and government entities provide data, which at times appears contradictory.
Data compiled by the U.S. Department of Housing and Urban Development in the National Housing Market Summary said that year-over-year results for the second-quarter 2013 had increased across the board, but were generally down compared to first-quarter 2013. According to the summary, the second-quarter results “indicate the housing market recovery continues to gain strength, although regional variation exists.”
The third-quarter results have not been published. Other, more recent market indicators provide mixed results. On October 31, Freddie Mac stated that its research reveals that the housing market had lost steam in recent months. Freddie Mac’s analysis found that in this “softening” market, mortgage rates declined for the second week in a row.
In a statement accompanying the data, Frank Nothaft, vice president and chief economist said that, “The Fed saw improvement in economic activity and labor market conditions since it began its asset purchase program, but noted the recovery in the housing market slowed somewhat in recent months and unemployment remains elevated. As a result, there was no policy change, which should help sustain low mortgage rates in the near future.”
On November 5, Trulia, Inc. (NYSE: TRLA), a real estate website, said that home prices increased by 0.6 percent in October were the lowest month-over-month increase in seven months. “This continued slowdown in asking prices is largely due to expanding inventory, rising mortgage rates, and declining investor activity,” the statement said. Despite the slowdown, asking prices remain above historical norms, and are 11.7 percent higher than 2012 asking prices.
Trulia pointed to the “uneven” nature of the “housing and economic recoveries in America” and worried this “could aggravate political partisanship.” In its September housing market report, Realtor.com said trends, such as expanding inventory and and price stabilization, had continued from August. This, Errol Samuelson, Realtor.com’s President, says is “a continued trend toward a healthy market balance,” but “imminent economic factors could pose a significant threat to these improvements.”
Trulia and Realtor.com tend to agree with Moynihan that aspects of the market are preforming well, such as high home prices, and factors are coalescing to provide overall balance. However, they are also concerned with outside influences, namely politics and the economy. Freddie Mac and the Federal Reserve, on the other hand, see things a little more pessimistically — worrying that rising mortgage rates will contribute to a widespread decline in activity.