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Housing Outlook Continues to Brighten, Say Economists

Housing Outlook Continues to Brighten, Say EconomistsHousing Market

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 economists participating in yesterday’s National Association of Home Builders (NAHB) construction forecast webinar 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.

“The aggregate information suggests we’re just in a pause mode right now in terms of these measures,” said Crowe, who noted this could partly be the result of an early spring that brought much better weather than usual into the picture at the start of this year and pulled some housing activity forward.

Pointing out that less volatile quarterly data have continued to show modest improvement in key housing indicators such as builder sentiment, new-home sales and housing production, Crowe said the “housing outlook continues to slowly brighten.”

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 homebuyers 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.

“No one is anticipating that an upward path for housing will run in a straight-line trajectory,” said Crowe. “The economy is in an uneven recovery and Read the rest of this entry »

Written by Michael Solovay | Discussion: 73 Comments »

Americans’ Expectations Align to Encourage Home Buying

Americans’ Expectations Align to Encourage Home Buyingbuy vs rent

By Keosha Burns

More consumers may be looking to purchase homes with a shift in several key housing market indicators, according to Fannie Mae’s March 2012 consumer attitudinal National Housing Survey. More Americans now expect both home rental and home purchase prices to increase over the next year. Nearly half of consumers expect higher rental prices, the highest number recorded since monthly tracking began in June 2010. Thirty-three percent expect home prices to increase, up 5 percentage points since last month, and the highest percentage recorded in over a year. In addition, confidence in consumers’ views of their own finances is stabilizing—for three straight months—44 percent believe their personal finances will get better over the next year. These trends may be providing Americans with an increased sense of urgency to buy a home as 73 percent of Americans now believe it is a good time to buy a home, up from seventy percent in February.

“Conditions are coming together to encourage people to want to buy homes,” says Doug Duncan, vice president and chief economist of Fannie Mae. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”

Homeownership and Renting

Thirty-three percent of respondents expect home prices to increase over the next 12 months, a five percentage point increase from last month, the highest level over the past 12 months.

The survey shows that on average, Americans expect home prices to increase by 0.9 percent over the next 12 months (up slightly since last month).

Additionally, 39 percent of Americans say that mortgage rates will go up in the next 12 months, a five percentage point increase from last month.

The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in over a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.

On average, respondents expect home rental prices to Read the rest of this entry »

Written by Michael Solovay | Discussion: No Comments »

Survey Shows Consumer Attitudes More Positive

Survey Shows Consumer Attitudes More Positiveconsumer confidence

A new survey shows that Americans’ concerns about key economic and housing issues are beginning to subside.

Fannie Mae’s February 2012 National Housing Survey shows that consumer attitudes have stabilized across most indicators—including personal finances, housing, and employment—compared to late summer and fall of 2011. The survey polls 1,003 Americans via telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts.

The survey shows that the most dramatic change revolves around the economy—35 percent of Americans now feel that the economy is on the right track, up 19 percentage points since November, and 57 percent think the economy is on the wrong track, down 18 percentage points since November.

Americans’ confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. Also important to note, Americans’ concerns about losing their job in the next 12 months has stabilized since the late fall, with 76 percent of Americans saying they are not concerned in February 2012, compared to 70 percent in November 2011. Fannie Mae believes that the recent pick-up in the pace of hiring over the past few months is directly responsible for alleviating consumer concerns about unemployment.

Here are some additional highlights from this important survey:

  • Only 12 percent of respondents believe that their personal financial situation will worsen in the next 12 months, a 3 percentage point drop from January and the lowest value in over a year.
  • 33 percent say their expenses have increased significantly over the past 12 months, a 3 percentage point decrease from last month and the lowest level in the past 12 months.
  • 28 percent of respondents expect home prices to increase over the next 12 months (consistent with last month), while 15 percent say they expect home prices to decline (down 1 percentage point since last month).
  • 10 percent of Americans say that mortgage rates will go down in the next 12 months, a 2 percentage point increase from last month.
  • The percentage of respondents who say it is a good time to sell rose by 3 percentage points to 13 percent, the highest level in over a year.
  • 45 percent of respondents think that home rental prices will go up, a 2 percentage point increase from last month.

Let me assist you with all your South Florida real estate needs.  Contact me at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Boxers or Briefs?

Is buying new underwear a sign of economic times?

Take a look at this video by Adam Kuperstein of NBC Miami.

I never really thought about it this way, but it makes sense.

Let me know what you think about this and leave me a comment.

Written by Michael Solovay | Discussion: No Comments »

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