(Source: Mortgage News Daily)
Steadier job growth and improving
consumer confidence are now boosting home sales and home prices may finally
find a bottom this year according to the latest State of the Nation's Housing report released this morning. The report, produced by the Joint Center for
Housing Studies of Harvard University, says further that stronger home sales
should pave the way for a pick-up in single-family construction over the rest
of 2012.
Conditions, however, will keep this
recovery "subdued." The backlog of
nearly 2 million loans in foreclosure means that distressed sales will remain
elevated and will keep a downward pressure on prices and another 11.1 million
homeowners are underwater on their mortgages, dampening both sales of new homes
and investment in existing units. While
vacancies have been declining the report notes, they still remain well above
normal, holding down demand for new construction in many markets.
What the for-sale market needs most, the
authors say is a sustained increase in employment. This might in turn bring household formation
back to normal levels. The depressed
pace of homebuilding has been a major factor in hiring and pulled down growth
in the gross domestic product (GDP) from 2006 to 2010. Since the beginning of 2011, however, both home
construction and home improvement spending have made a positive contribution to
GDP in four out of five quarters.
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