Tuesday, July 8, 2014

Housing outlook

"One of the foremost economists covering the housing market is Celia Chen with Economy.com. Her latest U.S. Housing Outlook, just released. Here is a summary of her key projections:  As employment conditions improve, pent-up housing demand will be released.  Home sales will remain at 5.5 million this year and accelerate to 6.4 million in 2015.  Credit remains tight, but mortgage lenders are expected to ease in coming months.  A smooth recovery depends on the Federal Reserve‚s ability to manage interest rates higher.  The U.S. housing market will rebound in the second half of this year and will strengthen further in 2015.  Demand will pick up, and a slender inventory of desirable homes for sale and tightening rental markets will jump-start residential construction. Strong demand will keep house prices appreciating.  A healthy housing market has substantial positive downstream effects on the broader economy.  Homebuilding drives job growth, while homebuying and growing housing wealth drive consumer spending.  Rising house prices also benefit credit quality. Gains in sales and property tax revenues help fill state and local government coffers.  These forces will boost overall economic growth, which will in turn fuel stronger demand for housing."

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