Housing Remains Steady

 

Housing continues to bounce along the bottom, but it has fared slightly better in recent months.
Courtesy of NAHB

Recent data on the gross domestic product confirm a marked deceleration in economic growth during this year’s first half, with the second quarter coming in at only 1.3 percent and the first quarter revised down to just 0.4 percent from an earlier estimate of 1.9 percent.

Revisions to previous years revealed that the 2007-09 recession was deeper and the recovery has been weaker than previously thought, with the peak-to-trough decline in GDP revised to 5.1 percent from an initial estimate of 4.1 percent, and GDP remaining below its peak level from the fourth quarter of 2007.

Federal Reserve’s Beige Book provided more evidence that the economic recovery is failing to gain much traction, indicating that economic activity slowed in six of the 12 Fed districts in recent months.

Residential construction spending has been flat, with a modest rise in single-family construction spending offset by declines in multifamily construction and home improvements.

House prices have stabilized, with both the Federal Housing Finance Agency housing market index and the Case-Shiller composite indexes firming in May. Modest gains in pending home sales (contracts signed) point to improvements in existing home sales during the coming months, although new home sales have continued to edge lower.

The recession and slow recovery have cut deeply into the homeownership rate, which was 66 percent in the second quarter, down 3.2 percentage points from its peak in 2004. Younger households have fared relatively worse than their parents, with larger declines in homeownership rates in the 35-45 and younger-than-35 age groups.

- Courtesy of NAHB