Tuesday, July 8, 2014
"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."