Check out the latest from the respected Economists of the National Association of Home Builders:
A Happier New Year for the Economy and Housing, But…
This year promises to be a happier one for both the economy and housing. More pain from a battered and bruised U.S. economy may lie ahead but the general trajectory has turned from down to up.
The worst is over, but the economy and housing in particular will remain subpar and unable to perform at normal, healthy levels.
Looking into our crystal ball for 2010, we see a long haul back to full health following a long, brutal recession. The national economy will continue to gain strength throughout the year, but at a slower pace than is characteristic for the early stages of recovery. (more)
Housing Data Continue to Be Uneven
Existing single-family home sales showed their third month of improvement in November, rising to a seasonally adjusted annual rate of 5.77 million. This was the highest monthly sales figure since the 5.87 million reported in April 2006.
However, since existing home sales are based on settlements that do not capture new contracts but rather reflect sales agreements from earlier months, many of the November sales resulted from pressure on buyers to close by the end of that month to qualify for the then expiring first-time home buyers tax credit. (The tax credit has since been extended into 2010 and expanded to include repeat home buyers. See www.FederalHousingTaxCredit.com for details.) (more)
Housing Prices Inch Upwards
The S&P/Case-Shiller 20-city price index has now risen for five months in a row (July through October). And although the measure is down 7.3% from October 2008, the year-over-year rate of decline has slowed in each of the past seven months (April through October).
Further, the year-over-year decline is no longer in the double digits that prevailed for more than a year and a half. The Federal Housing Finance Agency (FHFA) price index rose in the second and third quarters. As of the third quarter of 2009, it was down only 3.7% from the third quarter of 2008. (more)
Housing Still Faces Significant Headwinds
Although the economic outlook for housing in 2010 has brightened and the extended and expanded home buyer tax credit will provide a much needed boost, the housing market continues to face significant challenges that could slow or even derail the recovery.
The job market, though improving, remains weak; potential home buyers still need large downpayments and near stellar credit to obtain a reasonable mortgage; and builders continue to face difficulty in obtaining acquisition, development and construction (AD&C) loans and, in many cases, have been burdened with significant adverse changes to the terms of existing loans. (more)
