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 Economic Free Fall Is Losing Momentum
The contraction in real gross domestic product (GDP) for the fourth quarter of 2008 now stands at an annualized rate of 6.3%, according to the “final” estimate released by the Commerce Department on March 26. This represents a major downshift from the third quarter of 0.5% and was the sharpest decline since the depths of the 1982 recession. (Click here for more.)
The Labor Market Will Absorb More Damage
Normal lead-lag relationships ensure that the labor market will continue to lose ground while GDP growth stabilizes and begins to post modest below-trend positive growth later this year. (Click here for more.)
Mortgage Rates Should Fall Somewhat Further
Today’s home mortgage market is essentially a fixed-rate world, as adjustable-rate loans have nearly exited the scene. Furthermore, Fannie Mae and Freddie Mac recently have been accounting for about 70% of the fixed-rate mortgage (FRM) market, with FHA/VA loans making up most of the rest. (Click here for more.)
Consumer Views of Home Buying Conditions Have Improved
Broad measures of consumer confidence by the Conference Board and consumer sentiment by the University of Michigan remained at or below their respective record lows in March – primarily because of the extremely weak labor market conditions prevailing at that time as well as a weak outlook among consumers for income over the next six months. (Click here for more.)
Home Sales May Have Stabilized
Sales of both new and existing homes perked up a bit in February from their respective record lows. Furthermore, more-timely survey measures produced by NAHB suggest that the demand for new homes is firming up on a seasonally adjusted basis. (Click here for more.)
The Recovery in Housing Production Is Coming into View
The recent data on home buyer demand described above have bolstered our view that new-home sales bottomed out in the first quarter. Our short-term sales forecast depicts a gradual recovery process that begins in the second quarter and gathers momentum through 2010. (Click here for more.)
The Early Stages of Economic and Housing Recovery Will Be Relatively Gradual
Under ordinary conditions, the economy would be expected to rebound at a quick pace as major cyclical drags lift and forceful policy actions give a strong push forward.
However, the coming economic expansion figures to be less robust than usual, due to two structural “headwinds” – tighter credit conditions with less financial leveraging in national and global systems; and less aggressive consumer spending as heavily damaged household net worth and reduced prospects for capital gains encourage more saving out of current income. (Click here for more.)