Un articulo de Jeff Miller
Since the start of the Great Recession there has been little reason for enthusiasm about the US housing market. The home construction industry and related sectors have been a continuing drag on the recovery.
In my circle of friends I know of several first-time home purchases in the last couple of years. I was reminded of this last night when visiting my niece and her husband, seeing their beautiful new urban home and enjoying a wonderful "Restaurant Week" dinner at a place new to us all. It is too easy for us stodgy old analysts to forget that successful young people want their own homes. For them, the time to buy is now.
Regular readers know that I embrace the illustrative power of the anecdote, but I live on data. Taking a look at this week's calendar, I expect more media attention to the prospects for improvement in housing.
With an open mind, no specific positions, and a multi-year record of skepticism on this sector, I am receptive to the question: Is it time for a turn in housing?
The Final Word on Housing
I do not have a strong personal feeling on housing. I understand the need to work off the inventory of abandoned homes and to deal with foreclosures. This is the widely-cited shadow supply. I know also that there is shadow demand from new families and people unwillingly living with parents.
Housing demand is linked to perceived affordability and employment. Here are some sources that we should all consider:
Building Permits show increasing strength. This is a favorite indicator for me. Steven Hansen does a nice, in-depth look at the growth trend.
Affordability of housing requires looking at both down payments and monthly payments. Check out The Bonddad Blog for a good analysis of both.
Hard Data on Construction has improved, despite some builder confidence surveys (via Calculated Risk).
And finally, the conclusion from Calculated Risk, a source we all respect from the early and accurate analysis of the housing market decline. This conclusion is careful and nuanced, distinguishing a bottom in prices from a bottom in sales. Read the entire article, but here is the key takeaway:
And it now appears we can look for the bottom in prices. My guess is that nominal house prices, using the national repeat sales indexes and not seasonally adjusted, will bottom in March 2012.
I expect this to be an active topic of discussion this week and during the Spring. Any sign of life in housing would help the economy, and would provide some new sector and stock ideas.
The Final Word on Housing
I do not have a strong personal feeling on housing. I understand the need to work off the inventory of abandoned homes and to deal with foreclosures. This is the widely-cited shadow supply. I know also that there is shadow demand from new families and people unwillingly living with parents.
Housing demand is linked to perceived affordability and employment. Here are some sources that we should all consider:
Building Permits show increasing strength. This is a favorite indicator for me. Steven Hansen does a nice, in-depth look at the growth trend.
Affordability of housing requires looking at both down payments and monthly payments. Check out The Bonddad Blog for a good analysis of both.
Hard Data on Construction has improved, despite some builder confidence surveys (via Calculated Risk).
And finally, the conclusion from Calculated Risk, a source we all respect from the early and accurate analysis of the housing market decline. This conclusion is careful and nuanced, distinguishing a bottom in prices from a bottom in sales. Read the entire article, but here is the key takeaway:
And it now appears we can look for the bottom in prices. My guess is that nominal house prices, using the national repeat sales indexes and not seasonally adjusted, will bottom in March 2012.
I expect this to be an active topic of discussion this week and during the Spring. Any sign of life in housing would help the economy, and would provide some new sector and stock ideas.
