The U.S. housing market in 2012 is expected to move in a slow, gradual upward path, according to economists participating in an NAHB-sponsored housing webinar last week.
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The U.S. housing market in 2012 is expected to move in a slow, gradual upward path, according to economists participating in an NAHB-sponsored housing webinar last week.
The latest softening of housing figures is a result of typical month-to-month volatility and unusual seasonal factors rather than an indication of any significant downward trend in the broader housing market, NAHB Chief Economist David Crowe said.
"The aggregate information suggests we're just in a pause mode right now in terms of these measures," Crowe said. He 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.
Crowe said the "housing outlook continues to slowly brighten," and he pointed out that less volatile quarterly data show modest improvement in key housing indicators such as builder sentiment, new-home sales and housing production. Also, numerous other fundamentals remain positive for housing at this time, including demographic factors, historically favorable mortgage rates that are not expected to move higher than 5 percent by the end of next year, and the fact that more than 100 local markets are currently listed on the NAHB/First American Improving Markets Index.
Still, challenges to a housing recovery remain, including rising foreclosures, tight lending standards for homebuyers and builders, and difficulties in obtaining accurate appraisals. There were also disappointing job-growth numbers in March and remaining uncertainty in the European economy to worry about, Crowe said.
"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 we can expect some corresponding ups-and-downs in the housing market in the months ahead. However, NAHB believes that, on the whole, we can expect a slow and gradual recovery in housing starts, home sales and the overall housing market in 2012."