The National Association of Business Economics' latest report has revealed that projections for GDP growth remains in the first quarter of 2001 remains "sub-par". Concern about federal debt, unemployment, and business regulation ruled the NABE panel, causing experts to forecast only moderate growth in 2011.
The NABE also reports that "consumer spending is expected to remain modest throughout the forecast horizon due to weak job gains, persistently high unemployment, and negligible growth in household net worth."
On the bright side -- the chances of the economy slipping back into recession are considered low.
The housing market, however, continues to struggle. The National Association of Realtors reports that existing home sales fell in October after two months of gains.
Lawrence Yun, NAR chief economist, said the recent sales pattern can be expected to continue, but may improve come Springtime. "The housing market is experiencing an uneven recovery, and a temporary foreclosure stoppage in some states is likely to have held back a number of completed sales. Still, sales activity is clearly off the bottom and is attempting to settle into normal sustainable levels."
The third quarter also saw levels of home value depreciation accelerate, this according to Zillow.com Real Estate Market Reports.
Their experts report that we have seen 51 consecutive months of declines, with values now 25 percent below their peak.
In comparison to Depression-era housing declines, "from the end of 1928 to the end of 1933, nominal home values fell 25.9% according to Robert Shiller's reconstruction of long-term home price appreciation in the United States."
In addition, foreclosure liquidations rose again, to a new peak for the third quarter. More than 1.17 out of every 1,000 homes was liquidated in September.
Yet, in almost contradictory news, the Mortgage Bankers Association reports that the mortgage delinquency rate in the U.S. declined last quarter "amid hints of improvement in the job market." Michael Fratantoni, the MBA's vice president of research and economics reported that "although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter." Therefore, the delinquency rate may have declined, but it remains high.
The National Association of Realtors echoes this sentiment, releasing a statement earlier this month noting that the housing market recovery depends on jobs, as well as access to credit.
"Modest changes in mortgage rates are less important to a housing market recovery than the number of people who are able to obtain mortgages,” said NAR Chief Economist Lawrence Yun.
Helping this cause? Interest rates have dipped to the lowest in two decades, leaving housing affordability near its highest level nationwide for the seventh consecutive quarter.
For more information please visit: http://realtytimes.com/c/MiroslavaFitkova
Written by Carla Hill
Comments(0)