Tags: housing | slump | ahead

Experts: Housing Headed for Slump Next Year

By    |   Monday, 23 Nov 2009 03:13 PM

Experts warn that the recent rebound in the housing market, helped by the tax-credit for first-time homebuyers, won’t continue into next year.

Already the Commerce Department reported that October home starts plunged 10.6 percent from September to the lowest level in six months.

And some analysts expect the market to really tank in 2010.

As for the $8,000 tax credit, “most of it is simply shifting sales from one period to another,” Global Insight economist Patrick Newport told CNBC.

“It doesn’t get rid of the fundamental problem: There's still a glut of houses.”

He expects new home sales to average an annual rate of just 4.75 million in the second half of 2010, down 19 percent from this year’s fourth quarter.

Others are skeptical of the recovery too.

“We expect a little stall in 2010,” David Crowe, chief economist at the National Association of Home Builders, told CNBC.

“I agree, you do advance demand. So you steal it for the future.”

The sluggish economy, particularly rising unemployment, will weigh on the market, he says.

“The economy and the job market didn't pick up as people expected in ’09, and as a consequence that is rolling it in 2010.”

Even Federal Reserve Chairman Ben Bernanke has sounded a pessimistic note, though he sees residential housing investment turning positive next year.

“Housing faces important problems, including continuing high foreclosure rates,” Bernanke said in a recent speech.

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Experts warn that the recent rebound in the housing market, helped by the tax-credit for first-time homebuyers, won’t continue into next year.Already the Commerce Department reported that October home starts plunged 10.6 percent from September to the lowest level in six...
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2009-13-23
Monday, 23 Nov 2009 03:13 PM
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