March 26 - The median sales price for a new home increased 3.0 percent to $246,800, suggesting the housing market recovery remains intact. Bobbi Rebell reports.
The Daily Digit today is $246,800. That's the median sales price for a new home, according to the U.S. Commerce Department. It's up 2.9 percent from a year ago, but the hike isn't the real problem. The lack of supply is. Sales are being hampered by low inventories in some major parts of the country, falling more than expected in February after hefty gains the previous month. But steady gains in prices suggest the housing market recovery remains intact. The S&P/Case Shiller composite index of 20 metropolitan areas confirms that trend. According to the survey, U.S. single-family home prices rose in January, starting the year with the biggest annual increase in six-and-a-half years. Robert Shiller, Yale University Economics Professor: SOUNDBITE: ROBERT SHILLER, YALE UNIVERSITY ECONOMICS PROFESSOR, (ENGLISH) SAYING: "We're seeing more evidence of a rebirth of the housing market. One thing I've learned over years from looking at housing market, they're very different from the stock market. They have momentum. And when they start going up, they generally keep going up for a year or even more." Shiller also sees an interesting change in the mentality of the buyers. SOUNDBITE: ROBERT SHILLER, YALE UNIVERSITY ECONOMICS PROFESSOR, (ENGLISH) SAYING: "People have gotten less excited about this house in the suburbs. You know, we've been through that, the McMansions, remember that? When everyone was building a huge house, and they all were going to get rich by doing that? That's old. That's early twenty first century. We are now in the second decade. And I am not sure that the enthusiasm is there. So if you look at home prices, it's apartment buildings that have been going up much more than single family homes." Shiller's advice? rent. He points to problems with lending standards, the heavy involvement of government in the recent housing boom and tax advantages to home ownership that may soon be changed by Congress.