NEW YORK - While no one is ready to call the bottom of the worst housing collapse in decades, there were glimmers this week that the severity could be waning.
Reports Tuesday showed the glut of newly built homes on the market fell to a five-month low last month, while the decline in home prices is starting to ease, and in some cities values are even starting to rise. What’s more, existing home sales rose slightly from June to July, according to data Monday.
“The bottom of the housing downturn is coming into view,” said Moody’s Economy.com Chief Economist Mark Zandi.
But there are still very serious risks to any housing turnaround. Mortgage rates are above 6 percent when they should be below, based on historical trends. Fannie Mae and Freddie Mac, which together hold or guarantee half the U.S. mortgage debt, could need a government bailout. And a slowing economy and rising unemployment could scare off home buyers.
There also was plenty of bad housing news this week among the slivers of good.
The closely watched Standard & Poor’s/Case-Shiller home price index tumbled a record 15.4 percent during the quarter from the same period a year ago.
Likewise, a government report Tuesday showed second-quarter home prices falling by 4.8 percent, also a record.
And the surprising 2.4 percent increase in new home sales from June to July reported Tuesday was really an accounting bounce because June was worse than first measured.
“We need to see more of the same (kind of reports) over the next few months showing increasing affordability and a reduction in inventory,” before a housing recovery can start, said Nigel Gault, Global Insight Chief Economist.
Nevertheless, home prices in 14 cities in a Case-Shiller index of 20 across the country showed improvement from May to June. Nine even recorded positive returns, including Dallas, Minneapolis and Cleveland.
And Zandi said the worst may be over for some markets like Boston, Chicago and Denver where prices have come down enough to be more in line with local incomes and rents.
While the most overheated markets like Las Vegas, Phoenix and Los Angeles continue to post sharp price declines, sales there have jumped in recent months as buyers snatch up cheap distressed houses.
Las Vegas led the largest annual declines in the Case-Shiller index, falling almost 29 percent followed by Miami and Phoenix at about 28 percent.
“There’s no question people are getting values today better than they could have dreamed of getting two years ago,” said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors in Miami.