IHS Global Insight has released a report that say that housing price in the US rose by .2% in the third quarter compared to the second. The research firm looks at 300 metropolitan markets. Prices rose in 169 of these markets.
The odd part of the study was that IHS says that housing in now undervalued, at least based on its Byzantine methodology. The firm writes “For the nation as a whole, the housing market is now slightly undervalued – 8.6 percent when weighted by market value; 10.1 percent when weighted by housing units.”
Recent information on the rise of unsold foreclosed homes, an increase in mortgage delinquencies, the relative failure of the government’s loan modification program, and the large number of “interest rate only” mortgages that reset in 2010 make it unlikely that the IHS data is any real indication of the direction of the housing market.
Housing prices will probably not be going up by the third quarter of next year.
Douglas A. McIntyre