A 1 percent climb in new jobs nationwide last year won’t be enough to boost the lethargic housing market, according to a report from Local Market Monitor, a home price forecasting firm. The negligible boost in new jobs won’t be enough to make up from 2009′s 3 percent job loss, the report says, spelling bad news for the housing market, which many experts agree is largely dependent on employment. This news comes on the heels of a negative U.S. housing market report from Case-Shiller late last month, which showed that January housing prices are down 3 percent from the same month a year earlier. [Housing Wire]
Posts Tagged ‘housing market’
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New York City-area home prices remained relatively flat in January, according to the S&P/Case-Shiller Home Price Index, released today. The report, which does not take condominium or co-op units into account, shows a 0.9 percent drop in home prices month-over-month (see full report below). Prices are down 3 percent from the same time period a year ago. This performance is in line with the overall momentum in the housing market nationwide. The index’s 20-city composite dropped 1 percent month-over-month and declined 3.1 percent from January 2010. David Blitzer, chairman of S&P’s Index Committee, said that the data show a protracted real estate slump. “The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery,” Blitzer said. “At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing.” TRD
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The younger set may be benefitting more from mortgage-related tax deductions, according to a report from the National Association of Home Builders. Because younger households tend to have more housing-related debt and lower incomes, the NAHB says they take advantage of mortgage interest tax deductions more often than their older counterparts. The report also shows that among the taxpayers who claimed a mortgage insurance-related deduction, 59 percent were under 45 years old. “Opponents [of mortgage-related tax deductions] falsely argue that the deduction is only for the wealthy but it is clear that the mortgage interest deduction is also of great value to younger homeowners,” said Robert Dietz, an assistant vice president with NAHB. TRD
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Stan Humphries
Poor credit scores are becoming an increasingly difficult hurdle for potential homebuyers to overcome, according to real estate website Zillow.com, which says roughly a third of Americans currently have credit scores so low that they’re unlikely to qualify for a mortgage. While the declining credit scores — nearly 30 percent of Americans have a credit score of 620 or lower — could explain this, changing attitude toward home lending could also be at fault. Stan Humphries, chief economist with Zillow, said that the recession has changed many lenders’ mindsets regarding credit scores. “Four years ago, in the era of easy-to-get subprime loans, many borrowers with low scores did buy homes, which in turn helped contribute to a housing bubble,” Humphries said. “Today’s tighter credit is a predictable response by banks after the foreclosure crisis.” TRD
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A housing recovery already? No way, say some economists. Moody’s economists say that the likelihood of a double-dip in the nationwide housing market is “uncomfortably high,” according to DSNews. The tracking firm is decidedly pessimistic about the nationwide housing market, and Celia Chen, a senior director with Moody’s, said that overall economic conditions spell bad news for a housing comeback. “We have downgraded the near-term housing outlook based on the lingering weakness in the demand for homes, the expectation that job creation will remain soft this year, and the slow speed at which the mortgage industry is working through distressed mortgages,” Chen said. [DSNews]
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Once seen as a rock solid wealth-building method, homeownership is
losing its cache among investors and economists in the wake of the
housing market crash, according to the New York Times. While many
investors once assumed that home values would appreciate — barring
unforeseen influences like neighborhood decline and natural disaster —
that logic has been turned on its head, according to Stan Humphries,
chief economist with real estate website Zillow.com. “There is no iron
law that real estate must appreciate,” Humphries said. “All those theories [that] advanced during the boom about why housing is special… didn’t hold up.” [NYT] -
Michael Feder
The nationwide housing market may not be out of the woods yet, according to real estate tracking group Radar Logic. “It is our belief that housing prices will decrease in the autumn, perhaps precipitously, and that may cause a second dip in the U.S. economy,” Radar Logic CEO Michael Feder said. Citing a recent report from Moody’s economist Celia Chen, which suggested that a double dip in the residential market had a one-in-four likelihood of occurring before the market recovers in 2012, Feder said that caution is key. “As we begin to see data for the Fall, we expect it will be soft, that volumes and prices will move lower,” Feder said. “If we need consumer confidence to generate the spending needed to revive our economy, housing does not seem to be a likely source.” TRD
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Has the housing market hit bottom? Charles Cohen, head of Cohen Brothers Realty was among the nationwide panelists tackling the question in this MSNBC video. Cohen, for his part, said that New York City has seen a move toward recovery. “We’re seeing a general improvement in New York City,” Cohen said. “We’re seeing velocity, stabilization… rents are not going down any further.”
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The housing market has not fundamentally changed since 2006, Casey Mulligan told MSNBC. Mulligan, an economics professor at the University of Chicago, said that houses that were in demand still are, and that the prices are still high, even when adjusted for inflation. Mulligan predicts that in the next few years, the market will continue to see historically high prices.
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Home builders are showing slightly more optimism this month, according to the National Association of Home Builders’ index of builder confidence, although industry sentiment still remains comparatively low. The rating, which measures data in the middle of each month, climbed to 19, up from a rating of 15 during March. Industry experts believe this increase in confidence is due in part to the impending first-time homebuyer tax credit, which may be spurring more home sales. Despite this uptick in confidence, however, a rating of less than 50 indicates poor industry sentiment, according to the NAHB.
