05.27.2008 11:11 am
Home prices decline ever so slightly
St. Louis Post-Dispatch
St. Louis housing prices dropped 0.04 percent in the first quarter, the Office of Federal Housing Enterprise Oversight reported last week. That’s not bad, considering that OFHEO’s national index fell 1.7 percent, the largest quarterly decline on record.
St. Louis home prices were rising as recently as the fourth quarter, and they’re still up 1.72 percent in the latest 12 months.
OFHEO’s index relies on sale-price and refinancing data to estimate home-price trends. Some competing indicators show bigger declines here.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
Nobody who understands economics should imply that falling prices for homes is “bad” without qualification. Housing is a consumer good, and the major object of economic policy should be to make consumer goods plentiful and therefore cheap and affordable to all consumers. Failing to recognize that falling home prices make housing more affordable to a lot of people leads to whacko government policies that favor “high rollers” who have made bad financial decisions in purchasing real estate over people who invest and consume prudently.