Outlook for a Housing Market Recovery

 Home prices may well find a bottom this year, and stronger sales should pave the way for a pickup in single-family construction over the course of 2012.

That’s the assessment made by Harvard University’s Joint Center for Housing Studies (JCHS) in its recently released “State of the Nation’s Housing” report. The report - which has been released since 1988 - is an essential resource for both public policy makers and private decision makers in the housing industry.

The bottom line of the report is that - after several false starts - there is reason to believe that 2012 will mark the beginning of a true housing market recovery.

 

However, employment growth remains a key factor, providing the stimulus for stronger household growth and bringing relief to some distressed homeowners. And, if the broader economy weakens in the short-term, the housing rebound could again stall.

 

Here are just some of the findings in the report:

 

• The monthly mortgage payment for the typical home currently compares more favorably to rents than at any time since the early 1970s.
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• By the first quarter of 2012, existing home sales were 5.2 percent above year-earlier levels, with single-family sales up 6.3 percent.
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• Sales of newly constructed homes in the first quarter of 2012 stood 16.7 percent above year-earlier levels.
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• The inventory of existing homes for sale shrank by some 23 percent in 2011, reducing the supply in the first quarter of 2012 to its lowest level since 2006.
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• Single-family permitting, a leading indicator of starts, was also up 16.9 percent in the first quarter of 2012.

The complete report provides a current assessment of:

 

• The state of the housing market and the foreclosure crisis
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• The economic and demographic trends driving housing demand
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• The state of mortgage finance
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• Ongoing housing affordability challenges

 

You can download the full report from the JCHS’s website. You can also download a convenient handout of Key Housing Industry Facts from the website.

 

 

 

~~Mortgage Market Guide