[See One Sign the Housing Bust Could End Soon.]
The downward spiral of home prices seems to have slowed somewhat, says Diane Swonk, chief economist at Chicago-based Mesirow Financial, but the real concern is the potential for continued downward pressure on prices. "It's creating a vicious cycle," she says. "As the foreclosures that were delayed last fall come into the market, it's pushing prices down further. It's very hard for buyers and sellers alike to want to get into a market where they don't know what the price is going to be in four weeks time."
2.1 percent. Despite news of rising prices in nearly every other part of the world, at 2.1 percent, inflation in the United States remains fairly low. Nevertheless, economists say the economic climate is right for inflation to start ramping up, and it could happen fast.
"The threat is more directional," Luschini says. "It's that we've gone from concerns of deflation to now experiencing some minor month-over-month increases in inflation, which while still low, from an observation standpoint are threatening to become something more untoward. It's setting up for the prospects of inflation becoming problematic."
Twitter: @mmhandley
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