Finally, An Uptick In Housing Prices, But…

Finally, a little good news has appeared on the housing front. The benchmark S&P/Case Shiller housing index has shown a slight uptick after eight months of decline, rising .7% in April compared to the prior month.

While any sign of life in the housing market is a relief, it’s important to note that spring is traditionally a strong buying season, as families hustle to move at the end of the school year. What moves relatively quickly in April may languish on the market in September.

Moreover, housing prices are down 4% over the past twelve months. And when you look at multi-year statistics, the truly astounding plunge in housing prices becomes painfully evident. From a high of 202.44 at the beginning of 2006, the Case Shiller index now clocks in at 138.84, a decline of over 31%.

This is the underlying reality behind the stresses facing both consumers and the banking systems. A speculative real estate market and bad lending practices created a matrix of bad financial decisions, especially unaffordable mortgages and imprudent home equity loans, whose overhang will require a long time to work through.

To add insult to injury, any slight improvement in the housing market must be weighed against the deterioration in the government’s finances, where staggering amounts of cash were deployed via the TARP and stimulus spending programs for extremely modest results.

Read the full story at at CNN Money.