NEW YORK (MainStreet) -- This week brings a flood of new data on the U.S. housing market, and by and large, the bulk of it is positive.
First up is CoreLogic’s January 2012 MarketPulse report, released on Jan. 18, in which chief economist Mark Fleming says the U.S. housing market could finally be turning a corner in 2012.
“While 2011 was clearly a challenging year, there is a lot to be positive about looking ahead to 2012,” said Fleming. “The time is right in 2012 for prices to begin growing again, and housing affordability will put a floor under any further significant declines.”
Fleming points to stronger consumer sentiment as a big factor for his optimism – the housing market just can’t grow unless the American taxpayer believes the U.S. economy is back on track, and that seems to be happening.
One example of that is home equity lines of credit, which CoreLogic reports are on the uptick for the first time in five years. Another reason is the “over-supply” of U.S. homes on the market, a trend that seems to be receding in recent months, according to the report.
Those trends, plus continuing low mortgage rates and higher home affordability, are finally fueling a housing rebound, and one that should pick up steam in 2012.
Next up is Freddie Mac, which is out with a new outlook for 2012 that shows that the economy is “undoubtedly in a better place” than it was in 2010 and 2011.
Even so, the lender isn’t calling for a “speedy recovery” in 2012, and the housing market recovery that CoreLogic is touting may turn out to be a short-term drag on the overall economy. Here are some key takeaways from Freddie Mac’s “U.S. Economic and Housing Market for January,” released on Jan. 18.
- Economic growth will likely strengthen to about 2.1% in the first quarter.
- The current U.S. unemployment rate of 8.5% is likely to increase after seasonal gains are reversed.
- Mortgage rates are projected to remain very low, at least in the beginning of 2012.
- For 2012, expect home sales to grow between 2% and 5% year-over-year.
- The housing-market recovery will be delayed as long as there remains a large gap between buyer and seller sentiment.
While we are seeing more good news from the economy, Freddie Mac says it’s not quite enough to trigger a full-blown housing recovery.
"With the new year comes a sense of cautious optimism," says Frank Nothaft, Freddie Mac vice president and chief economist. "There are some positive signs in the job market and consumer confidence; housing is starting to raise hopes for continued gradual economic recovery. But the economy still is giving some mixed messages."
Finally, today’s housing starts number from the U.S. Commerce Department shows a decline in starts (by 4% from November 2011 to December 2011). Economists say a drop in rental construction was the biggest factor impacting housing starts.
All told, the economy – and the housing market – seem to be improving, but only at a glacial pace, and even then in fits and starts. Still, after five years of unrelenting bad news, at least the economy is moving in the right direction.