NAHB: Housing Market Should Stabilize in 2008 - Modern Distribution Management

Log In

NAHB: Housing Market Should Stabilize in 2008

Though there is currently downward momentum" in the housing market right now, the downswing is poised to move back up again in 2008, economists at a recent National Association of Home Builders forecast conference said.

The economists gave these reasons:


  • The overall economy and job growth continue to move ahead at a decent pace;

  • Core inflation is under control;

  • The late-summer credit crunch in mortage markets is easing; and

  • And the supply-demand equation will balance out as builders "whittle down" excess inventory.


"Home sales should bottom out by ...

Author
Date

Though there is currently downward momentum" in the housing market right now, the downswing is poised to move back up again in 2008, economists at a recent National Association of Home Builders forecast conference said.

The economists gave these reasons:

  • The overall economy and job growth continue to move ahead at a decent pace;
  • Core inflation is under control;
  • The late-summer credit crunch in mortage markets is easing; and
  • And the supply-demand equation will balance out as builders "whittle down" excess inventory.

"Home sales should bottom out by the end of the first quarter 2008, and I have starts up in the third quarter of next year, assuming the inventory overhang stabilizes," said NAHB Chief Economist David Seiders.

Residential fixed investment should turn positive in the fourth quarter 2008, he said.

Still, even as home sales move upward in the first half of next year, they will remain on par with levels recorded in the late 1990s. Housing starts are expected to be down nearly 12% next year, according to NAHB projections. Single-family starts are expected to be down 50% from their peak in the first quarter 2006.

"By the end of 2009, we may be at a pace of 1.5 million units of new housing production (including manufactured homes). Once we are out of the woods, we should see good growth in front of us -maybe 2 million per year," Seiders said.

UBS Investment Bank managing director and chief economist Maury Harris forecasts that housing will bottom out in the first half of 2008 and move back up in the second half of the year. He says the housing recovery will be "hampered" by foreclosures on subprime and Alt-A loans this year and next.

"The foreclosures aggravate the inventory situation and weigh on the market more than in past cycles," he said.

Still, at least one economist at the conference says the economy will absorb the shock from stress in the subprime mortgage arena, which makes up 13.5% of the market.

Source: NAHB.org news release

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.