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Written by Jonathan Smoke
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08.16.2007 |
 Last week the National Association of Realtors (NAR) revised their forecasts for existing home sales in 2007 and 2008 to 6 million and 6.4 million respectively. NAR also lowered the forecast for new home sales for 2007 and 2008 to 852,000 and 848,000 respectively.
This week, the National Association of Home Builders (NAHB) released its revised forecasts, in which they also continued the trend of reducing projections for home sales. Their view of existing home sales isn’t as rosy as NAR. NAHB is forecasting 5.1 million sales this year and 5.05 million in 2008. It isn’t until 2009 when existing home sales pick back up to 5.45 million. | | No comments for this item |
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Written by Jonathan Smoke
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08.15.2007 |
 In response to our series of articles about declining home ownership brought on by credit tightening—or some might say a return to sanity by the credit markets—we received another thoughtful suggestion for an article from a member of our HousingIntelligence community:
“The combination of record foreclosure rates combined with the difficult lending environment for first time home buyers should significantly increase the percentage of household formations that become rent, driving the demand for apartments, reducing vacancy and increasing rents and values. Factor in lower interest rates and the impact of apartment values should be significant.” | | No comments for this item |
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Written by Jonathan Smoke
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08.14.2007 |
 Jack Guttentag, the Mortgage Professor wrote an excellent article last week that currently is featured in our Real Estate News. In “Mortgage upheaval prompts look at wholesale loans,” Guttentag shopped three different types of mortgages at a dozen large wholesale lenders.
The results he found were telling about how the credit market is impacting current mortgage quotes. And it doesn’t take much to extrapolate the data to show how the mortgage market is impacting demand for housing. | | No comments for this item |
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Written by Jonathan Smoke
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08.10.2007 |
 Over the last week I have been reviewing declines in home ownership and what that means for new home demand. Yesterday I showed that at a national level, the decline in ownership in 2007 essentially produced net negative demand for new homes.
But when we look at the local level, the picture is more complex as several factors can influence demand for new homes. For example, migration that exceeds census estimates will cause a greater need for new housing. Shifts in demographic patterns from younger to older, less educated to more educated, and lower income to higher income households will lead to more demand for new housing. | | No comments for this item |
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Written by Jonathan Smoke
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08.09.2007 |
Yesterday I highlighted the troubling specter of declining ownership rates. When  ownership rates go up, they doubly benefit the market for new homes. When they go down, the opposite is true.
New home demand can be estimated using an assumption that existing households are adequately served by existing housing stock, ceteris paribus. So, ignoring demographic shifts and aging housing stock impacts, we could estimate that the new households requiring new housing would be equivalent to the number of new households who want to or can be owners. | | No comments for this item |
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