U.S. housing market, economy to improve in H2 this year, rental market sunny, says Freddie Mac economist; other analysts see dimmer housing picture
June 28, 2011
– The U.S. housing market will pick up in the second half of 2011, as it follows faster growth in the general economy, while the rental market is the only current bright spot in housing, said Freddie Mac's top economist, HousingWire reported June 27.
Other companies differed, such as research firm Altos Research LLC, which said home prices are likely to rise and fall for a long period. Capital Economics Ltd. said low demand will hold back any consistent rise in housing prices until 2014.
However, Freddie Mac's chief economist Frank Nothaft said housing is becoming more affordable because of recent declines in prices, and he expects mortgage rates to remain between 4.5% and 5% during the rest of 2011, reported HousingWire.
Nothaft also said in his Monday blog that home sales remain above last year's, when tax credits began to run out.
Low consumer confidence in the general economy is restraining buyers from major purchases, such as houses, and they are waiting for indications that home values have settled out, said Northaft, HousingWire reported.
The rental sector is strong. The National Multi Housing Council said vacancy rates fell on buildings with more than five units, and monthly rents climbed during the past year.
Sales of existing homes fell 15.3% in May, consumer confidence dropped to a six-month low, and homebuilders' confidence hovered near the lowest levels recorded.
The future of housing is unclear, as is the length of time the soft economy will last, according to Anthony Sanders, professor of real estate finance at George Mason University, reported HousingWire.
Tighter buying standards and higher guarantee fees at Freddie Mac and Fannie Mae will slow purchases, even though drops in housing prices have slowed or even begun to increase in some parts of the U.S., said Sanders.
The primary source of this article is HousingWire, Plano, Texas, on June 27, 2011.