Small bit of hope in home prices, but large dose of reality in wealth gap
President Barack Obama makes remarks on the home mortgage crisis at Dobson High School in Mesa, Ariz.
Stacey Vanek-Smith: Housing prices rose one percent in May according to the Case Shiller index. Julie Neiman is with Smith Moore and Company in St. Louis. She joins us live. Good morning, Julie!
Julie Neiman: Good morning, Stacey.
Vanek-Smith: Julie, home prices up for two months now. Are things turning around?
Neiman: Well, this is in the category of not so horrible news. You've got some seasonal improvement going on here. Summertime's always the prime time for moving around and interest rates are still really low. But we're still not back to 2003 levels. That's 10 percent above historic trend lines, so we probably have some down side to go. What we're looking at now -- housing is not getting worse -- it's just kind of bobbling around the bottom. That's good news. We have very tight credit conditions among lenders -- a lot of contract cancellations as well.
Vanek-Smith: There's a new study out this morning from Pew Research Center that found the collapse in housing prices affected the net worth of minorities more severely than the general population. Could a jump in housing prices like this -- change that potentially?
Neiman: Well, it's also tied into unemployment. Because unemployment is the highest in blacks and Hispanics, and usually a lot more worth is tied up in the housing market as well. Black unemployment right now is close to 17 percent, Hispanics close to 13 percent. You've got a big wealth gap going on here and you have more housing repatriation -- or more housing defaults going on in those cities where the housing numbers are the worst. So it's all tied together with unemployment and net worth.
Vanek-Smith:Julie Neiman with Smith, Moore and company. Thank you, Julie.
Neiman: You bet.