New figures point to a "more durable" housing recovery than in
previous years, with housing now making a significant contribution
to economic growth, according to a new report.
An improved balance between supply and demand means the current
housing recovery isn't likely to fade soon, according to the
October housing market report from CoreLogic. The report predicts
steadily increasing demand, following a 24 percent annual jump in
new home sales and an 11 annual percent gain in existing home
sales, based on August figures.
"While the broader economy is sluggish, the housing market is
not," wrote Mark Fleming, CoreLogic chief economist and one of the
report's authors. "Housing is now a significant positive
contributing sector to GDP growth and its recovery is growing more
Market fundamentals cited
Fleming went on to say that current demand is not driven by
policy interventions, but by more fundamental causes such as
investor interest in single-family properties, pent-up demand among
consumers and increasing consumer confidence in the housing market
The report notes that month over month housing price gains from
February to May were the strongest seen since CoreLogic began
tracking those figures in 1976. For August, the CoreLogic housing
price index showed a 4.6 percent annual gain, with prices rising in
all but six states.
The report puts the inventory of homes for sale at a 6.4 month
supply, just above the six-month figure generally considered to be
ideal, with tighter supplies in many regional markets.
Some slowdown in the housing market is expected going into the
cold weather months, but even accounting for that CoreLogic still
expects home prices to post a 5.5 percent overall gain for 2012.
That would be in contrast to the past three years, where strong
price gains in the spring and summer were eventually wiped out by
slowdowns in the fall and winter.
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