U.S. housing market bottom within sight

Although some housing markets across the nation have experienced price declines of 50 percent or more from their peaks, namely in high-cost states such as Florida and California, it appears a bottom is in sight.  According to a report from Moody’s Economy.com, the bottom, in terms of home prices, will likely take place in the fourth quarter.

MAKING SENSE OF THE STORY FOR CONSUMERS

 

·      The report states that nearly 62 percent of the nation’s 381 metropolitan areas will have experienced double-digit-percent declines in home prices, peak-to-trough, before bottoming out.

 

·      Housing inventories are falling, sales are rising, and home prices are becoming better aligned with incomes, which will help lead to a housing correction. Although lawmakers are working on plans to help stabilize the market, the report forecasts that even with further government intervention, the recession will keep the housing market from fully recovering until the end of the year.

 

·      According to the report, home sales will have declined by 40 percent and housing starts by 70 percent nationwide from peak to trough.  However, California’s home sales tell a different story.  C.A.R. economists project sales for 2009 to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.