Even though existing home sales fell in March, the consensus among the speakers here at the NAHB Spring Construction Forecast Conference is that things are looking up for the housing market.
The group of economists, many of whom would consider themselves pessimists, are overwhelmingly optimistic about the future outlook of the housing market. Their projections and assessments of the market are all pretty consistent, give or take a quarter.
David Crowe, Chief Economist for NAHB, gave some convincing evidence as to why the recovery is imminent, as we’re currently at trough for single-family housing starts:
- Low mortgage rates
- Strong pent up demand and demographics
- Significant fiscal stimulus
- Some movement on practical foreclosure prevention
- Significant monetary policy, traditional and balance sheet
- Falling material prices
- Very, very small positive signs in spending, incomes, stock market
NAHB
Here are a few of the other highlights, some things you might have already known, or guessed yourself:
- Housing prices should hit bottom at the end of the year
- According to Maury Harris, Chief US Economist for UBS, real GDP will begin to grow at a moderate annualized rate starting in Q3 of 2009
- Fed fund rate should not rise again until mid-2010
- Home sales should rebound before the unemployment rate peaks
- The National Income Accounts saving rate statistic is a key factor in predicting recovery. Harris believes people are saving enough right now to aid recovery.
- There should be no immediate fear about inflation. In fact, as Jim Glassman with JP Morgan pointed out, “it’s below where we want it to be.”
- Housing’s drag on the GDP will slow down
- Opening the credit markets is key to recovery
- Mark Zandi, Chief Economist with Moody’s, believes that home sales are at the bottom and that inventories have peaked. We will work off the inventory over the course of the next 18-24 months.
- The job market will stabilize this summer
- Zandi projects that foreclosures will peak in the first quarter of 2010, assuming there is a lot of help that is expected
In other news, still related, NAHB showed off their new brand, with no fanfare.
