May 06, 2009 04:26 PM

Finding the “Green Shoots” in Housing

By Building Experts Team

You may feel like you need a telescope to see it, but reports are coming in from a variety of sources that housing recovery may be on the horizon. Yesterday, Federal Reserve Chairman Ben Bernanke, called it “green shoots” of recovery. Call it a light at the end of the tunnel, a glimmer of hope, whatever. The bottom line is that for the first time since the crunch, there’s a somewhat positive new message out there.

NAHB Chief Economist David Crowe estimates that new single-family home sales more than likely hit their lowest point in the first quarter of 2009. In addition, he says that sales for single-family homes in 2009 are projected to total 364,000, and grow to as much as 539,000 in 2010.

We’ve already reported on the current optimism in the housing market and positive outlook, but why all the news about the upturn? We look to a regular source (NAHB) for these answers:

The perfect storm of a generational low prime conventional conforming home mortgage interest rates, low home prices and the $8,000 first-time home buyer tax credit work together to improve housing affordability
The market can gain strength from the pent-up demand and demographics
The “echo boom” generation, the children of the Baby Boomers, are in their late 20’s and looking for homes

While unemployment is still on the rise, and expected not to peaks until year’s end, Maury Harris, managing director and chief U.S. economist at UBS Investment Bank noted that, “you can get a turnaround in housing before unemployment improves.”