Yes, home prices have been rising, but is this a “recovery” or something else?
The market is currently dysfunctional. There is an overhang of shadow inventory, and the banks are actively restraining supply by not adding foreclosed homes to the nation’s inventory. Additionally, record low mortgage rates are bolstering demand.
Once again, we are not observing a recovery. We are just bouncing along the bottom waiting for employment to pick up so new household formation begins rising.