The latest gauge of the housing market revealed a slower climb in home prices but revealed some other statistics that indicate this sector may not be the one to "bail out the economy," according to one expert.
According to Tuesday's Standard & Poor's Case-Shiller report, the 20-city index showed only five cities that saw their annual rates of price appreciation grow in February while 13 posted lower annual rates of growth.
Don Ganguly, CEO of HomeUnion, told J.D. Hayworth and John Bachman on "America's Forum" on NewsmaxTV that there were positives and negatives to be found in the report.
"It is positive in the sense that it makes it more affordable for buyers to buy homes, but in this case the smaller rise or the rise that we see here is really fueled by a lot of lack of activity," Ganguly said. "I mean we're not enough first time buyers. If you look at the new home sales they're way down, month over a month it's setting down to like $360,000 or some thousand instead of $450,000. The existing home sales are down as well so they're down to $450,000 or $460,000.
"So you have to look at the overall picture and say, distrust in inventory is down so we're seeing less cheaper houses and it's down by like some 14 percent.... It certainly means a slowdown. It does mean that we've got tighter inventory. And some of what we're seeing is obviously the winter weather which is why the pending home sales actually peak up a little bit because a lot of people that didn't go around the winter are trying to find homes."
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Looking at the numbers, Ganguly said he doesn't believe the housing index will hurt the economy, but he doesn't see it improving it much either.
"It's not good if you look at the overall housing between the construction and the jobs ... it's about 18 percent of the GDP, give or take, and a lot of that is construction work," he said.
"If you look at the home builder or the DOW Jones index, it was somewhere around 553 last April or May, around there and it's now down about 470 so homebuilder stocks are not in great shape. You find companies like Beazer that are refinancing debt rather than doing it from operations.
"The consensus is that I don't think the housing is going to be a drag, but I don’t think that housing is going to bail out the economy as well right now."
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