2006 New Homes Starts Up

February 16, 2006 – 8:21 am

January pace of housing starts tops forecasts

Incoming Federal Reserve Chairman Ted Bernanke told Congress on Wednesday that "a number of indicators point to a slowing in the housing market." And, "given the substantial gains in house prices and the high levels of home construction activity over the past several years, prices and construction could decelerate more rapidly than currently seems likely."

Most forecasters expect the housing market will avoid a catastrophic crash. Ed Leamer, director of the UCLA business forecast, said  "It’s going to be a buyer’s market not a seller’s market — possibly  for a long period of time,"

Despite Bernanke’s and Leamer’s remarks and widespread prognostications of a housing market slowdown, January saw the highest level of housing starts in over 32 years. The Census Bureau’s newest report showed that new homes construction is at an annual pace of 2.28 million homes.

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Housing Market Slowdown

February 14, 2006 – 9:15 am

White House expects home price increases to cool

The White House Council of Economic Advisers wrote in its annual Economic Report of the President, which was sent to Congress yesterday that, "Prospects remain good for continued growth in the years ahead." While the overall economy is expected to continued growth, the CEA’s assessment of the housing market was somewhat more subdued. According to CEA member, Matthew Slaughter, the rate of home price appreciation is "likely to slow in the future."

After 5 years of 9.2 percent annual growth rate, due to low interest rates, strenghtening job market, and rising income, the next 5 years is likely to see a downward trend in part due to rising interest rates, the report said. A dramatic housing bubble burst is not expected because "the elevated level of house prices will sustain homebuilding as a profitable enterprise for some time."

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By admin | Posted in home price, home sales, home selling, home values, housing bubble, housing market | Comments (0)