Check out the latest from the respected Economists of the National Association of Home Builders. Click the link at the end of the paragraph for a detailed report.
The Pace of Economic Contraction Is Slowing
The sharpest contraction in economic activity during the current recession occurred in the final quarter of last year when a massive financial shock threatened to wreck the U.S. and global economies. Real gross domestic product contracted at a 6.3% annual rate in that quarter as spending declined sharply for all sectors other than the federal government. (more)
Consumers Are Expecting Somewhat Better Economic Times
Major measures of consumer confidence and sentiment recently have been regaining some of the ground lost during earlier stages of this economic recession. The recent gains primarily reflect brighter expectations regarding economic conditions down the line rather than more upbeat assessments of current economic conditions. (more)
Housing Affordability Measures Continue to Improve
The affordability of home buying continued to improve through April, as declines in house prices and mortgage interest rates more than offset the effect of eroding median family income. The standard measures do not capture the effects of changes in mortgage lending standards or price expectations harbored by prospective home buyers, but the recent improvements are essential to a meaningful turnaround in home buying activity before long. (more)
Consumers’ Views of Home Buying Conditions Continue to Strengthen
The Reuters/University of Michigan survey of consumer sentiment revealed that 80% of consumers had a favorable view of home buying conditions in May, up from 72% in April and the highest reading since early 2004. (more)
House Price Depreciation May Be Easing Off
All measures of national average house prices have shown stunning declines from the unsustainable highs of 2006 to 2007. These declines have taken a heavy toll on household wealth, as well as on the quality of mortgage credit and the strength of financial institutions while restoring the affordability of home buying to a large degree. (more)
Home Sales Apparently Have Bottomed Out
The cyclical trough for home sales (seasonally adjusted) apparently was reached early this year, and a gradual recovery may very well be under way at this time. Sales of new homes (Commerce Department series) fell by 76% from the cyclical high in July 2005 to the apparent low in January of this year, but sales volume was up by 7% as of April. (more)
Backup in Long-Term Rates Will Not Prevent Housing Recovery
Long-term Treasury rates have moved up considerably from their recent lows in mid-May, even though the Fed is holding the federal funds rate near zero and committing to maintain that policy stance for an extended period. Long-term fixed-rate mortgage yields have been subject to some upward pressure in the process, moving above 5% for the first time since March. (more)