As the economy continues to recover, the millennial generation is still feeling the longer-term effects of the recession due to underemployment and low salaries combined with high student debt and uncertainty about the future. These factors have affected the housing market, and the renter status of this generation was examined in a new survey by LendingTree. Continue reading
Overall, growth is expected to continue for the year, but at a modest rate, according to the Fannie Mae February 2012 Economic Outlook report.
Economic growth is projected to be at 2.3 percent for 2012, an increase compared to 1.6 percent last year, according to the report.
For the first time in seven years, the housing market is projected to contribute to gross domestic product (GDP), the report also stated, but by a very modest amount.
“Risks to the forecast are more balanced between the upside and downside since our January forecast,” said Fannie Mae chief economist Doug Duncan. “The economy appears to be more resilient than in previous months, and should be less vulnerable to shocks, including any spillover from the European sovereign debt crisis”…
Read the rest of this article (and photo) by DSNews.com here: “Moderate Growth Projected for 2012.”
Two prominent home-price indices continued to show declines in September and October, with one outlook indicating no more than flat growth in the next two years.
A home-price index report from loan data aggregator Lender Processing Services showed the national average sales price for single-family homes fell 4.4 percent year over year and 1.2 percent month to month in September, to $202,000.
LPS’ Home Price Index, launched in July, tracks monthly sales in more than 13,500 ZIP codes. Within each ZIP code, the index shows historical price changes for five home-price levels, including entry-level, middle-market and high-end homes.
Prices declined on a monthly basis in all ZIP codes covered by LPS. The top 20 percent of homes (selling for more than $317,000) saw a slightly smaller monthly decline, 1.2 percent, than the lowest 20 percent (selling for less than $102,000), which saw a 1.4 percent drop.
“Each year, prices have risen in the spring, but revert in autumn to a downward trend that has not only erased the gains, but has led to an average 3.7 percent annual drop in prices to date. The partial data available for October suggests a further approximate decline of 1.1 percent.”
A report released by property data firm CoreLogic bears out the monthly decline in October. For the third straight month, nationwide single-family home prices fell on both a monthly and yearly basis, dropping 1.3 percent from September and 3.9 percent from October 2010. Excluding distressed sales (short sales and real estate owned home sales, also known as REOs), October’s index fell 0.5 percent from a year ago.
“Home prices continue to decline in response to the weak demand for housing. While many housing statistics are basically moving sideways, prices continue to correct for a supply and demand imbalance. Looking forward, our forecasts indicate flat growth through 2013,” said Mark Fleming, chief economist for CoreLogic, in a statement.
The index was down 32 percent in October from an April 2006 peak. Excluding distressed sales, the drop was 22.4 percent. CoreLogic’s index is based on 30 years of data for repeat sales transactions, and “price, time between sales, property type, loan type and distressed sales.”
Among the 10 most populous metropolitan areas in the country, six saw index declines in October. Only Washington, D.C., and New York-White Plains-Wayne, N.Y.-N.J., saw index increases above 1 percent. When distressed sales were excluded, six experienced index increases.
Most states, 34, experienced year-over-year index drops in October. Ten states and Washington, D.C., saw index rises of more than 1 percent. West Virginia led the way with a 4.8 percent annual rise.
At the other end of the spectrum, Nevada was the only state to see a double-digit index drop in October, down 12.1 percent. When distressed sales were excluded, 28 states and Washington, D.C., saw flat or rising home prices. South Carolina posted the biggest increase, up 4.6 percent.