Wednesday the New York Times reported:
ECRI predicted this months ago:
"END OF HOME PRICE DOWNTURN IN SIGHT"
Professional Report Excerpt - How to become a Pro Client)
(Full report received by ECRI Pro clients on 19-May-09)
"With U.S. home values far below their boom-time highs, most observers are resigned to an indefinite downdraft in home prices. It is this uncertainty about the ultimate bottom in home prices that has converted so many mortgage-related derivatives into toxic assets. Yet, at long last, the end of the home price downturn is in sight.
One key reason for the turnaround in the outlook is housing affordability, which is hovering around all-time highs. The current combination of drastically reduced home prices and very low mortgage rates has hardly ever been seen in living memory…
Most importantly, the U.S. Leading Home Price Index (USLHPI), designed to predict cyclical turns in real home prices, has now been rising for five months… But a three P’s analysis (see chart below) of the level of the USLHPI reveals an even more promising picture… the recent upturn in the USLHPI is almost as pronounced as the median in comparable past cycles… it is almost as pervasive; and … it is just as persistent. The implication is clear: this is a genuine cyclical upturn in the level of the USLHPI. Such an upturn in the USLHPI amounts to a forecast of a cyclical upturn in the level of home prices this year…
ECRI’s apparent optimism about the economy is very much at odds with a stubbornly downbeat consensus. When almost every seasoned analyst is so pessimistic, doubts about the likelihood of an upturn are entirely understandable.
While more analysts are coming around to our view about the economic recovery, there are plenty that remain doubtful. Only the reality of the recovery will convince such skeptics, but by then it will be much too late for decision makers to take timely steps to stay ahead of the curve.
We understand that some will be incredulous about our home price upturn call, coming on the heels of our business cycle recovery forecast… it is worth remembering that our apparent boldness is merely a reflection of what our objective leading indexes are telling us today."
- more about ECRI
- July 29, 2009 NY Times: "U.S. Housing Turning Corner "
- July 21, 2009: ECRI Predicts The End of the Recession is Imminent
- April 3, 2009: Upturn in ECRI's WLI Growth Rate Says US Business Cycle Recovery Ahead
- March 28, 2008: ECRI Calls it "A Recession of Choice"
- January 05, 2008 ECRI Says Fed Has Room To Cut Rates Despite Fears of Inflation