Popular financial media can be a good contrarian indicator. When headlines scream one thing, the opposite is more likely to follow.

We see the phenomenon repeatedly. After an extended stock-market rally, a slew of business stories arise to explain why the stock market has likely hit a permanent high. After the stock market has undergone an extended decline, multitudes of stories arise to question the sustainability of capitalism.But as predictably as day follows night, the trends these articles ride soon reach an apex, and markets move in the opposite direction.

Over the past two years, a slew of articles have lambasted homeownership. Many of these articles centered on why we would become a renter society or why homeownership was a relic of the twentieth century.

These anti-ownership writers were emboldened by the drop in homeownership rates, which had been pushed up to 70 percent during the height of the boom. The percentage rate had recently dropped to 66. Now it appears to be reversing. The Census Bureau reports that the nation's seasonally adjusted homeownership rate rose to 66.1 percent, suggesting the decline has abated, if not reversed.

A drop in the homeowner percentage was to be expected: Homeownership has hovered around the mid-60s for decades, so the decline was a matter of returning to the mean. That said, it was unlikely to go down any further. Most of us overwhelmingly prefer to own than to rent, and most of us (especially those with children) prefer the suburbs to the city.

We suspect more people will want to own when they are convinced price declines are over. On that front, Clear Capital reports that home prices increased again at a 0.6 percent rate in October. Year-over-year, though, Clear Capital reports a 2.8 percent decline.

We are always quick to point out that all real estate is local, and many local markets are showing significant improvement. Home prices in Cleveland increased 6.2 percent in September; Texas (which technically isn't local, but the news is encouraging nonetheless) saw housing starts jump 24.2 percent in September; Miami saw existing home sales hit a five-year high, surging 15.1 percent in September.

In other words, markets continue to clear, and we find it encouraging not only that lower prices have promoted more home buying in many markets, but also that firming prices suggest the worst of the discounting is over. This process should stimulate even more buyers to step forward.If it does, buyers are hitting the mortgage market at the right time. The European Union's continued travails with Greek debt have created a surge in U.S. Treasury security buying, which has helped lower mortgage rates over the past week.

However, this, too, could easily pass. Payrolls have been firming over the past couple months, which points to a strengthening economy. What's more, financial crises, like the one in Europe , that seem intractable often turn out to be quite ephemeral instead. Therefore, we still think it's risky to wait and hope for much lower mortgage rates.  

Courtesy of Jessica Regan.

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