Next year the U.S. housing market's rebound should accelerate, and the economic sector will be a positive contributor to the country's overall growth, according to remarks from S&P Dow Jones Indices' David Blitzer released today.
All major housing indicators are pointing up: builder confidence. In addition, mortgage rates remain near a 30-year low and the rate of home foreclosure is retreating.
"For the first time since the boom went bust, housing looks good," Blitzer said. "Anticipate that in 2013, the market will continue to normalize; that location, location, location once again will matter; and home prices across the country won't move in lock step as they did from 2004 to 2008. We could potentially see some strong city-by-city results such as strength in Washington, D.C., even though a party change in the White House isn't occurring, and in Phoenix, which was among the hardest hit cities."
Still, Blitzer warned the fiscal cliff-a collection of tax increases and spending cuts scheduled for the start of 2013 that, all told, could lessen GDP by about 5 percent-still looms. "If the U.S. plunges off that cliff," Blitzer remarked, "a recession may start in the first quarter, meaning jobless rises and declines in about everything else: GDP, profits, incomes, and stock prices for a few. If the cliffhanger ends on a positive note, the economy should continue to grow and by solid numbers. Unemployment would decline slightly; housing starts and sales would expand as well as consumer-related measures."
