No good or bad news for home prices

According to the Houston Chronicle, low job creation and rising foreclosures are leading experts to believe home prices in the United States will continue to drop.

Ted Jones, senior vice president and chief economist for Stewart Title, told the news source that the 54,000 jobs created in the United States in May is too low to incite more home purchases, which in turn will help raise home prices and boost the housing market.

Despite the Standard & Poor's/Case-Schiller index showing a price drop of 3.6 percent in the 20 surveyed cities for March, Jones remains optimistic. He predicts job-rich markets such as Texas will begin to recover.

Freddie Mac, however, forecasts lower GDP and higher inflation for the rest of the year. Originally the company anticipated a 3.4 percent GDP growth, which they have now adjusted to 3.2 percent. They have also revised their predicted increase in consumer prices from 2.7 percent to 3.1 percent.

But home sales have been reported above last year's pace, and Freddie Mac chief economist Frank Nothaft predicts a slow but solid improvement in the housing marketing in the next year. 

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