Housing analysts forecast summer warming trend
 

NEW YORK – Jan. 17, 2007 – Housing experts, speaking at a recent Real Estate Connect conference, said stabilization or improvement in mortgage rates, residential prices and household incomes will spark a rebound in the housing market by the middle of the year. 

Freddie Mac chief economist Frank Nothaft forecasts “some pretty clear, consistent signs of recovery in home sales and single-family construction” by summer. 

Expectations that the Federal Reserve will hold interest rates steady or take steps to boost the economy by cutting rates are responsible for predictions of a housing rebound, with experts noting that a jump in interest rates or unemployment rates could worsen the downturn. 

Housing economists also anticipate problems in the subprime niche, with some cash-strapped borrowers forced out of their homes as their monthly payments rise and become less affordable. This pattern could drive up inventory and exert downward pressure on prices. 

According to California Association of Realtors chief economist Leslie Appleton-Young, “Housing is always going to be sexy, but I think some of the buzz, when there’s less money being made, is going to go away.”

Source: Investor’s Business Daily (01/12/07) P. A8
 

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