Listing prices posted a second month of gains in April. This appears to be seasonal.
Housing demand correlates directly with employment and the economy gained jobs in April. The gains appear to be slowing however, and that’s bad news for the future trend. When all the stimulus and Fed pumping ends, it looks like the typical summer seasonal peak in house prices will fall well short of last year’s level. That could lead to a new low in prices later in the year, which would be very bad news for the state of mortgage collateral, and for therefore for the financial system and the economy. Keep in mind that the US taxpayer is on the hook for Fannie and Freddie’s losses, and that will be a drain on the system for years to come.
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