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RBS Economist Girard: Housing Not as Strong as It Appears

By    |   Thursday, 22 March 2012 07:42 AM

Recent news of recovery in the housing market exaggerates the strength a bit, says RBS Senior Economist Michelle Girard.

Existing home sales hit an almost two-year high with a 4.63 million annual pace in January and dipped just slightly to a 4.59 million rate in February.

"We've been a little spoiled in the last couple months,” Girard tells Yahoo.

“All the housing numbers have surprised us on the upside, in part because the weather has been very favorable.”

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The warmer weather than usual in much of the country has allowed construction activity to continue. “And people are even getting out and looking at homes when normally the snow would keep them inside,” Girard says.

That has boosted sales. But the winter purchases may simply be borrowing from spring, Girard says. “The numbers might not look quite as good in the spring.”

To be sure, it’s more than weather boosting home sales, she says. Fundamental demand is rising too, though in a subdued manner, as confidence grows about the economy and job market, Girard says.

“That’s encouraging people to move off the sidelines and take advantage of attractive home buying conditions.”

Many economists have turned bullish on housing.

“The U.S. housing market is stabilizing and very gradually carving out a recovery,” Sal Guateri of BMO Capital Markets tells Bloomberg. “Housing demand should pick up in response to falling unemployment and attractive affordability.”

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Thursday, 22 March 2012 07:42 AM
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