Latest housing figures close a bleak year
Home prices continue to fall in the U.S. in this grim year for the housing market.
Jeremy Hobson: There isn't exactly a mad dash right now to buy homes. So this news is probably not a surprise: Home prices fell in October in 19 of the 20 American cities surveyed in the S&P Case-Shiller Index.
That makes six months in a row that the overall index has gone down. And it's just the latest indication that 2011 was probably not the year the housing market turned itself around. Marketplace's Eve Troeh reports.
Eve Troeh: Cast your mind back to the beginning of this year. Remember the housing market predictions? Me neither.
I asked Richard Peterson at MarketPsych Data to take us back.
Richard Peterson: People were feeling like things were turning up because rates were low and because the equity markets were improving.
Were improving. Political standoffs in the U.S. and a debt crisis in Europe injected uncertainty. That made banks stingy. People who were ready to buy a house this year couldn't get a loan.
Peterson: Lending standards have tightened to 20 percent down plus good credit scores, and individuals are having to prove income over many many years.
Banks should be cautious after a bust as scary as the one we saw a few years ago, says Chris Thornberg at Beacon Economics. And he says falling prices are good: People don't have to borrow as much.
Chris Thornberg: Housing is not an investment. Housing is a consumption good. And on that basis, the cheaper the house, the better off we are as a society. You know if gas prices are going down, we're all happy about that.
Yet many prospective buyers are still waiting for that elusive bottom of the market. If prices are still falling, why buy now?
Economist Peter Morici at the University of Maryland says more homes would sell now, if employment and wages improved.
Peter Morici: If people had more incomes to buy homes, the housing market would bottom out.
Steady paychecks would let more people snap up good real estate deals. But for now rentals are on the rise, and builders are framing up more new apartments to meet demand in 2012.
I'm Eve Troeh for Marketplace.