Is 2012 The Year for The Housing Market?
This year, 2012, just might be the turning point for the housing market. With housing statistics and the amount of duration of the downturn may be the evidence of this turn around, says CoreLogic’s Chief Economist Mark Fleming. CoreLogic released the first MarketPulse Newsletter on Wednesday where Fleming explained his reasoning for such a prediction.
Fleming noted that housing is an industry with long business cycles. With regional housing recessions usually taking anywhere from 3 to 5 years to find their bottom, Fleming stated the national recession has acted similarly, due to its leveling along the bottom for the past two years. Fleming also noted that housing affordability is beginning to increase due to a combination of home price deflation and low mortgage rates.
“The time is right in 2012 for prices to begin growing again,” Fleming said, “and housing affordability will put a floor under any further significant declines.” Fleming will be sure to maintain his studies during the spring and summer buying season for even more positive signs. Households are paying off debts, while accessing credit easier, with some adding Home Equity Lines of Credit in the third quarter of last year.
Fleming showed a quarterly survey by the New York Federal Reserve Bank, that showed total household debt remains to decline. However, consumer sentiment rebounded strongly in the ending of 2011, putting up a 6 month high in December. It is safe to say that majority of the housing statistics moved sideways in the later part of 2011, but Fleming found the positivity’s in the numbers.
With all statistics put together gives the assumption that while it will be a while before dramatic changes are seen, the housing market is expected to maintain its upward movements in 2012. “While we cannot say with a high degree of certainty what 2012 has in store for us, indications based on the latter part of 2011 are that both the broad economy and the housing market are moving toward positive growth in 2012,” Fleming said.