Will the slowing economy impact the U.S. housing market?

TRD New York /
Jul.July 31, 2012 09:00 AM

Recent data has sparked growing belief that the housing market is recovering, but according to Bloomberg News, the economy is faltering, and for a third consecutive year that could slow momentum in the housing market.

Housing starts increased by 4.7 percent in June, and home builder confidence grew at the fastest clip in nearly a decade, according to the National Association of Home Builders. Meanwhile, the National Association of Realtors reported that home affordability reached a record high earlier this year.

But growth in spending on home construction and remodeling slowed in the second quarter — along with consumer confidence and job growth — after a strong first quarter.

Further, sales of homes have slowed. Though that appears to be caused by an inventory shortage, financing difficulties also persist, and the lack of sales is weighing on the industry. Analysts refuse to assume prices will increase steadily as a result of this shortage because they still expect a backlog of foreclosures to flood the market.

“I don’t know if housing is set up to lead the economy back because of the fallout from past excesses,” said Daniel McCue, research manager at the Harvard Joint Center for Housing Studies. [Bloomberg]


Related Articles

arrow_forward_ios
Realogy CEO Ryan Schneider (Credit: iStock)

Realogy’s plan to stop the iBuyers from gaining a foothold in Chicago

136 Clinton Avenue (Credit: iStock)

How to sell a haunted listing

Jerome Powell and New York City construction in October 2019 (Credit: Getty Images)

The Fed lowers rates, and once again real estate is loving it

Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Nonbank lenders could give serious boost to cooling housing market

Ben Carson on Opportunity Zones, unity and red and black ants: TRD Miami Showcase & Forum

Ben Carson on Opportunity Zones, unity and red and black ants: TRD Miami Showcase & Forum

Home foreclosures dropped nearly 20% in Q3, report shows

Home foreclosures dropped nearly 20% in Q3, report shows

Lennar reports 13% uptick in Q3 profit amid sluggish housing market

Lennar reports 13% uptick in Q3 profit amid sluggish housing market

arrow_forward_ios