Economists say housing outlook continues to slowly
brighten:
Mirroring the uneven economic recovery, the housing market
is expected to move in a slow, gradual upward path in 2012, while encountering
its share of speed bumps along the road, according to a forecast presented by
the National Association of Home Builders (NAHB) on the housing and economic
outlook.
While the latest monthly housing data have shown signs of a
slight softening, NAHB Chief Economist David Crowe said this is more reflective
of typical month-to-month volatility in the numbers and unusual seasonal factors
than they are an indication of any significant downward trend in the broader
housing market.
Crowe noted that numerous other fundamentals remain
positive for housing at this time, including demographic factors (with pent-up
household demand expected to ramp up and echo-boomers heading into their prime
household formation ages), historically favorable mortgage rates that are not
expected to move higher than 5 percent by the end of next year, more than 100
local markets currently listed on the NAHB/First American Improving Markets
Index, and the fact that house price-to-income ratio has now returned to its
historical average of about three-to-one versus the nearly five-to-one to which
it had previously risen during the height of the housing boom.
However,
he cautioned that housing still continues to face formidable challenges of its
own -- such as rising foreclosures, persistently tight lending standards for
home buyers and builders and difficulties in obtaining accurate appraisals.
Moreover, disappointing job growth numbers in March and uncertainty in the
European economy are undermining prospects for a vigorous recovery.
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