Housing Market Recovering Slowly

Housing Market Recovering Slowly
Please Share!

The housing market may be on a rebound, at last. New data is showing that price declines entering big cities, sales of new homes improving nationally and foreclosures in California dropping to levels that haven’t been seen since before the start of the credit crunch almost five years ago.

Eric S. Belsky, managing director of Harvard’s Joint Center for Housing Studies said in a news release, “With new home inventories at record lows, unless the broader economy goes into a tailspin, stronger sales should further stabilize prices and pave the way for a pickup in single-family housing construction over the course of 2012.”

Dan McCue, research manager for the Joint Center added, “We did want to highlight the differences we saw between this year and last year, and signs that seem to indicate that a recovery is beginning. In addition to the fact that it might be a long haul to get out of the deep hole we’re in. I do think that every time we talk about the return [of the housing market] we need to talk about how far the housing markets have gone. Never before has a downturn been so strong and a recovery so weak.”

The economy overall is starting to improve, but the housing market was the last one to stabilize. Good news, notices of default fell to 56,258 statewide in the first three months of the year, a 17.6% drop from the same period last year, DataQuick of San Diego reported. That was the fewest number of default notices filed since the second quarter of 2007.

Many homebuyers are young adults who have been sitting on the sidelines waiting for the job market to improve before jumping into a house loan. Finally, they feel comfortable to buy. “As markets tighten, these young adults may begin to take advantage of today’s lower home prices and unusually low mortgage rates. With rents up, home prices sharply down and mortgage interest rates at record lows, monthly mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s,” Belsky said in the release.

The Standard & Poor’s/Case-Shiller index of 20 U.S. cities is the most watched measure for home values and it showed price declines in January to February.  With pricing falling 0.8% from January to February, and were down 3.5% from February 2011.  Economists are trying to take this data with a grain of salt because the sales of homes are typically slow during those months.  The index’s year-over-year decline in home values has also been steadily shrinking in recent months.

Please Share!

About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

Leave a Reply

Twitter Chat