Posted on 05/04/2015 11:58:03 AM PDT by Citizen Zed
You know that recovery in the housing market that’s just around the corner? It’s not coming, no matter how confidently market watchers gloss over the recent string of weak economic reports, one analyst said Monday.
“The street is still waiting on the cyclical bounce that all prior post war recoveries experienced to show through in the data. Unfortunately, our analysis suggests that a cyclical pop for housing is not going to happen due to the bursting of the housing bubble which led to the financial crises,” said Steven Ricchiuto, chief economist with Mizuho Securities USA.
Take a look at housing starts: Recent rates of new-home construction are about one-third below the average pace over the past two decades, with starts for single-family homes dragging more than 40% below their long-term average, government data show.
Major obstacles facing the housing industry are relatively strict access to mortgages and a low share of first-time buyers. Meanwhile, millions of homes remain underwater (Black Knight’s most recent estimate says about 4 million homes are worth less than their unpaid mortgages), and home prices are racing higher, outpacing wage growth. In short, large chunks of the housing market are unable or unwilling to buy or sell a home.
“Clearly, the fact that the banking industry and the housing sector are still in the process of restructuring suggests that the economy is still confronting obstacles to growth,” Ricchiuto wrote.
Home builders, themselves, are struggling to pump up their business. Investors recently dropped shares of major U.S. home builders after companies reported quarterly earnings that included narrowing margins.
(Excerpt) Read more at marketwatch.com ...
Don’t worry. Folks will come along to tell us everything is fine, just fine.
Sounds like realtors will be adding their voice to the call for student loan forgiveness...
It's better for established neighborhoods if those older homes find owners.
The fact that Obama's government spending, debt and regulatory drag have prevented a normal non-housing economic recovery has something to do with it too.
I think you could be correct.
Doesn’t this sentence contradict itself: “Meanwhile, millions of homes remain underwater (Black Knight’s most recent estimate says about 4 million homes are worth less than their unpaid mortgages), and home prices are racing higher...”
New house construction is a major boost to the economy. The new home requires hundreds of products that are primarily manufactured in North America. Lumber, roofing, windows, doors, flooring, appliances, electric components, wiring, cabinets, plywood, carpet, tile, plumbing, etc. are manufactured here in the US and Canada. These industries and their distribution network employ millions of people.
It is a major driver of GDP and our economy.
We will always need new construction. Houses on average last 75 years. They burn down, flooded, earthquakes, hurricanes, torn down, etc. They are tearing down hundreds in Detroit and Cleveland right now. What we are continuing to see is an aging demographic where people wan tot move south and west. Also, more people are moving into 50 and over communities where they do not have to do yard work. Families are also smaller now. There is not as much need for the 3500 square foot house.
I noticed that contradiction too. I think in some markets, houses remain underwater. However, in other markets prices have increased to the point of being unaffordable to first time home buyers.
The fact is, it is harder to get a mortgage in the last five years than it was between 1995-2005. This is a good thing. Giving cheap money to anybody that could breath is what got us into this mess. Having to put 20% down to buy a house is what the rule was for 50 years. They changed the rules in the 90’s and it led to the crash.
I am not sure where you are located, but here in southern NH there are very few foreclosures listed in my Sunday paper. I would guess 30% of the amount there were at the peak.
I have the Fannie May: www.homepath.com site on my favorites. The houses on there now are low end houses/condos in less desirable locations. Four/five years ago there were high end houses in nice neighborhoods.
Lastly, what I am seeing in the lumber business is that the areas of the country that were driven by oil have slowed up substantially. The Texas markets have slowed up with the decrease in oil. Houston was the fastest growing market in the country in 2013 and 2014. Dallas, Austin and San Antonio were next in line. These markets have slowed up. Meanwhile, other areas are getting better. Florida for one. AZ and California too. MN, WI, IA, ID , MT , CO, UT all are getting better. Most of New England is getting better.
Residential real estate might come back a few years after all of the debts are repudiated, if the Baby Boomer die-off is mostly done—maybe 15 years or so.
While that is not perfect news, it mostly matters to the flippers and those trying to cash out their house to help fund their retirement.
??
Yes, people should be forced into tiny shacks that have character. How dare people think they should be able to choose the location or type of housing...
I never said anything about forcing anyone to move in a shack or forcing them to do anything.
Sorry.
“Souless McMansion” is the type of term I would expect from those that do.
That off-center oval window hanging out there by itself in an ocean of blank brick is a nice touch. Really draws your eye to the fake fireplace. Copper flashing though, ooh, quality.
Most of them are soulless.
Whoever coined the term "Hummer Houses" was dead on.
So true....
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