China's Home Price Recovery
China's Statistics Bureau reported that in July new home prices rose in 49 of the 70 cities measured. According to MarketWatch, that was the broadest advance in 14 months. At first blush, it would appear to be good news, but the markets judged otherwise. One of the reasons for the home price improvement may be that China's banks have been encouraged by the government to ease rates. That, in turn, apparently made housing more affordable.
The consensus among economists is that the central Chinese government will see this data as proof that it has done enough to help a recovery and stop its easing measures. That, in turn, may cause the slowing gross domestic product of the People's Republic to slow more.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, China, Housing