Financial 411: Tracking Changes in the Housing Market
Wednesday, May 18, 2011
What is up with the housing market? On Wednesday, the government said new home construction fell nearly 11 percent in April. But Thursday, we expect the National Association of Realtors to tell us that existing home sales grew last month, albeit modestly.
This uncertainty seems like bad news for real estate. Shiller, of the Case-Shiller home price index, thinks another double-digit dip is in the works.
But Shawn Tully, the senior editor-at-large at Fortune magazine, is optimistic, and said he thinks housing is back. He's watching how housing prices compare to rental prices.
"When you get to ratios or prices to rents that are below the historic average, and renting becomes more expensive than owning, it's time to buy," he said. Tully tracks recent developments in the housing market, and explains why he's thinking positively about the future.