Chart of the Week: House Market Still Down

These charts from Calculated Risk gives us a good idea of the state of the housing market in the United States. The twenty cities in the widely followed Schiller Price Index show price drops from the peak. Only five cities show improvement over last year.

The stock market may be up and business slowly recovering, but the real estate market is not responding nearly as fast, and it is where the bulk of consumer wealth is concentrated, and the equity in the mortgage backed securities plaguing bank balance sheets.  Nine banks have gone under in the first month of this year. The second chart shows the cliff that new home prices went over in 2007.  The small blip at the right shows the only 4% improvement over the bottom in January.

The lack of jobs is also showing up in the increasing number of delinquencies shown in the last chart.  According to real estate market experts, about 95% of the new home loans are being underwritten by the US government. That is another huge government expenditure that cannot go on forever.