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By Jason Stipp and Jeremy Glaser | 09-27-2012 03:00 PM

Sweet or Sour?

Morningstar markets editor Jeremy Glaser offers a taste of housing news, Spain's new budget, GDP revisions, and third-quarter stock performance.

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to The Friday Five. Headlines this week were either a) sweet; b) sour; or c) a little bit of both.

Here with me to offer the rundown is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: Jason glad to be here.

Stipp: So, what do you have for the Friday Five this week?

Glaser: This week we are going to talk about the Case-Shiller housing index, Spain, GDP, Kraft, and finally the end of the quarter.

Stipp: We saw a lot of housing metrics improving earlier this year. Case-Shiller was one of the last ones that we saw turn around. It seems like pretty sweet news, right?

Glaser: Yes, it is. The Case-Shiller, which is an index of housing prices on either 10 or 20 of the largest cities in United States, turned up again. Now, this is data for July--it lags, it takes little while to collect the data--and they said they saw about a 1.6% increase month-over-month.

This is pretty significant. We've talked to [Morningstar director of economic analysis] Bob Johnson about this before, and we've talked about this on The Friday Five before, that increasing housing prices are really almost good for everyone. It helps keep fewer people underwater. It allows them to refinance to low mortgage rates, which can free up cash for spending. It makes it possible for people to potentially move. It gets people excited to maybe put their houses on the market. It maybe gets builders thinking that it’s time to start building new houses and to get those jobs going.

This is only one data point, but it agrees with a lot of the other data points we’ve seen that show housing prices truly are moving up. So, certainly this is sweet news to get some confirmation from one of the most respected housing price indexes that things are moving in the right direction.

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