Investors like Bush plan
We had a follow-up today in the business section on Bush interest rate freeze.
Real estate investors Thursday foresaw a firming of house prices in the wake of President Bush’s plan to freeze interest rates on troubling home loans, a DePaul University professor says. “Investors are raising their expectations,” said business school professor James Shilling. On Wednesday, data from the S&P/Case Shiller Index — a measure of prices used by investors in housing futures — indicated a peak Chicago price in 2005 of $168,000. Forward contracts — the prices that investors expect values to be in six to eight months — were only $136,000. That indicated about a 15 percent decline in Chicago area home prices, Shilling said. On Thursday after Bush’s plan was detailed, the current price on contracts going forward rose to $158,000 — only a 6 percent decline from the 2005 peak. “I take that as a positive sign that having the freeze is going to have a positive impact on the housing market,” Shilling said. —Sally Duros
