There was a bit of good news for the long-suffering housing industry yesterday: The Federal Housing Finance Agency said home prices jumped by 1.8 percent in the second quarter of this year. That may not sound like much, but it's the biggest quarterly increase we've seen since the fourth quarter of 2005. In year-over-year figures, home prices were up 2.2 percent from the second quarter of 2011.
At the same time, sales growth has been sluggish. Home sales grew by 2.3 percent in July, according to figures compiled by the National Association of Realtors, but that's the second-slowest rate of increase for any month this year.
What we could be seeing is the effect of all the foreclosures clearing out of the housing market. Foreclosed homes generally see for less than other housing stock, which is why prices are rising. And a lack of foreclosed homes on the market could also be returning us to a normal state of progress in overall sales growth.
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