"Durable" Housing Recovery Seen

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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 geographically diverse."

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 itself.

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.

First published at: http://www.mortgageloan.com/durable-housing-recovery-seen-9267

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Personal Finance , Real Estate

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