Richard DeKaser's most important economic story of 2010
TEXT OF INTERVIEW
JEREMY HOBSON: Now let's bring in our regular Wednesday economist Richard DeKaser. He's chief economist at the Parthenon Group and he's with us live from Washington. Hi Richard.
RICHARD DEKASER: Good morning.
HOBSON: So for you, what is the most important economic story of 2010?
DEKASER: I think it's the stabilization of the housing market. You know this was the absolute epicenter of the collapse of the Great Recession. The news is certainly not good but the market is stabilized. Home sales today, if you look at the big pictures, new existing condos, single families, basically where they were at the very low point of 2009. There's been a lot of volatility but we've seen a floor on home sales. Home construction is actually moving up a little bit. I'll call it a qualified good news story in staunching the other collapse and free fall of housing, which seems to have played out over the past year.
HOBSON: And what about for the next year Richard? We got some sort of disappointing news about home prices yesterday. What do you think is going to happen next year over the housing market?
DEKASER: You're absolutely right. The Case Shiller Index showed a home price decline in the month of October. Very disappointing. But this is part and parcel of what we're seeing. Another indicator, the FHFA Price Index showed an increase in the same month. And that's what you see at these moments when indicators are mixed, stabilization is astray, and going forward I think we'll see this more the same. Bottoming along maybe modest gains as lenders loosen up the purse strings a little bit. But we've still got to work off of big inventory. So I'd say slogging ahead is the story for housing in 2011.
HOBSON: Let's hope you're right, at least that things are going to get better. Richard DeKaser, chief economist at the Parthenon Group, thanks and happy new year.
DEKASER: My pleasure and same to you.