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Home Prices

Case Shiller Index

I keep reading about the end of the housing crisis on various news and investment sites, but today we get the release of the Case Shiller Housing Index and it is the 6th month in a row of falling prices. You can see on the graph above that even though we had a slight recovery after the huge fall between 2006 and late 2009, the index is now in a pattern where it is slowly drifting lower.

Obviously this is not something that any politician of either party in Washington wants to see, and in spite of the Fed being “non-political” in its work, I’d expect to see some sort of stimulus come from the Fed aimed at raising home prices before the election in November.

From an investment perspective, this seems like confirmation that the stocks of companies that are focused on helping investors maintain their current residences should continue to outperform. Have you seen Home Depot or Sherwin Williams? They are both rocking.


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Mark