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5 Reasons to be Optimistic about Housing
Frank Anton, Vice Chairman / BUILDER / February 21, 2013
Moody’s chief economist, Mark Zandi, says “it’s just arithmetic” that makes him an optimist.
At 1.1 million units, Mark Zandi’s 2013 housing starts forecast is more optimistic than most (the consensus forecast is about 950,000 units). But he says 5 sets of fairly simple numbers justify his bright outlook.
Set #1: At about 3.5%, the 30-year fixed rate mortgage is at its lowest point in 2 generations.
Set #2: The dollar volume of mortgage lending, while still depressed compared to historical averages, is increasing steadily.
Set #3: Housing values, after spiking at unrealistic levels between 2004 and 2008, are back to normal. (See chart #1).
Set #4: Housing supply and housing demand, which were out of whack from 2007 to 2011, are back to the long-term trendline. (See chart #2)
Set #5: 2013 will be the fourth year in a row that the U.S. economy adds at least 2 million jobs, and job growth drives housing demand and housing starts.
You do the math. Seems to add up to a better housing market to me.