The NHAB housing market index was released this morning. And yes, it was disappointing. We have been saying for a long time that the real estate market may experience a double dip, and latest data show that this may actually take place.
The NAHB for July was 14, a 12.5% decline from June. This index has not been this low since April of last year.
David Crowe, the NAHB Chief Economist said, "the pause in sales following expiration of the home buyer tax credits is turning out to be longer than anticipated due to the sluggish pace of improvement in the rest of the economy. That said, we do believe that favorable factors such as low mortgage rates, affordable prices, and demographic trends will help revive consumer demand for new homes this year, and that new-home sales will improve by 10 percent in 2010 from 2009."
We think that all of the factors cited by Mr. Crowe are valid, except for the fact that they will not help revive the market this year. Those factors are based on the state of employment in this economy, and that is certainly not improving. Lastly, the 10% annual improvement expected by Mr. Crowe, most likely has already taken place during the first six months, so it is still very likely that we will see another dip in the housing market for the rest of 2010.
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