The housing market is sluggish thanks to high household debt levels and a weak employment picture, says Chad Morganlander, a portfolio manager for Stifel's Washington Crossing Advisors.
He notes that in March, the seasonally-adjusted annual housing-starts rate totaled only 946,000.
"Back in the '90s, pre-bubble, that was running around 1.2 million," Morganlander told
CNBC/Yahoo Finance.
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As for household debt, it totals 83 percent of GDP, he said. That's down from 100 percent in 2007, but still well above 1997's level of 66 percent. "Let’s face it, we’re still in an indebted market when it comes to household debt," Morganlander said.
On the jobs front, payrolls increased 288,000 in April. That number "is great to see, but we really need to see 350,000 per month on a quarterly basis" to benefit the housing industry, he said.
"You need to start to see job growth really accelerate."
Meanwhile, wages rose just 1.9 percent in the 12 months through April. And that's not enough to boost housing either, Morganlander said.
As for home prices, they advanced 12.9 percent in the year through February, according to the S&P/Case Shiller index for 20 major cities.
Nobel laureate economist Robert Shiller of Yale University isn't quite sure what to make of the housing market at this point.
"Our indices [the S&P/Case-Shiller home price indices] are basically flat right now" on a month-to-month basis, he told
ETF.com.
"It’s seasonal weakness. If you correct for seasonality, it looks like they [home prices] are still going up. But other indicators are showing signs of weakness, so I’m conflicted."
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