While the current economic outlook remains gloomy and the housing market is still weak in many parts of the country, a new report by Moody’s Economy.com suggests that there are some positive signs that the conditions in the housing market could improve later this year.
According to the report, “Housing in Crisis: When Will Metro Markets Recover?”, in the three years since the market began correcting, “inventories are flattening, prices are coming back down to earth, and sales are approaching stability.” However, the outlook hinges on stronger action by U.S. policymakers. Even with further government intervention, the recession will keep the housing market from fully recovering until the end of 2009.
From the peak of the housing boom in the first quarter of 2006 to the projected trough at the end of this year, total single-family home sales will have declined by 40 percent and housing starts by 70 percent. House prices have fallen in 70 percent of the metro areas over the past few years. By the end of the downturn, it is estimated that house prices will have declined by double digits peak to trough in nearly 62 percent of the nation’s 381 metro areas. In about 10 percent of the metro areas, price declines may exceed 30 percent.