Friday’s jobs numbers may have brought some of the bulls predicting a surging recovery this year back down to earth. It’s a sobering reminder that our comeback is going to be slow and uneven — not a straight-line trajectory of growth. But it’s worth keeping the bigger picture in mind: There are signs that even the weakest sectors of the economy are starting to pick up, even though our path to recovery seems to be so uneven.
This week, Trulia unveiled a new index that provides more up-to-date data on housing prices, which traditionally take a long time to come in and lag months behind the present. The index — which is adjusted for seasonal differences — shows that home prices have very slowly been rising over the last four months, from December 2011 through March 2012. That’s a big change from the Case-Shiller Index, the standard bearer of housing prices, which showed declining housing prices through the end of 2011 and January 2012.
This is good news for the housing market because the steep decline in housing prices has made potential buyers reluctant to take the leap — holding back the housing recovery and the economy as a whole.
That said, March’s disappointing jobs data could end up dampening enthusiasm among potential buyers — thus reducing demand and pushing down home prices — particularly if the economy shows other signs of pulling back. And there’s a large number of foreclosures that are expected to flood the market later this year (explanation here), which could be a big drag on housing as well. But the fact that one of the most troubled sectors of the economy is showing some life is a sign that not everything is headed south.