Real estate slump likely to last until year's end, economist says
July 26, 2007
BY GRETA GUEST
FREE PRESS BUSINESS WRITER
The nation's housing market hasn't seen the bottom of its current cycle and probably won't until the end of the year, according to the chief economist for the National Association of Home Builders.
David Seiders said Wednesday that the housing market has been weaker in the first half of the year than he predicted late last year.
"The key reason is the unanticipated and sudden turmoil we encountered in the subprime market earlier this year," Seiders said.
That has meant tighter lending standards and fewer buyers able to purchase new homes. And the rising wave of mortgage delinquencies and foreclosures has added to the problem.
"We are still dealing with those problems, and those cause massive uncertainty about where we are going," Seiders said.
Few markets have been spared from the housing downturn, he said. For example, Michigan is one of five states that have dropped the most since the first five months of 2005.
Seiders said single-family permits were down 60% in Michigan during the first five months of this year compared with the first five months of 2005. That compares with a nationwide drop of 31% in those permits in the same period.
"Michigan is probably getting back into the growth range," he said.
Housing is expected to pick up nationwide next year, he said. Seiders expects 1.42 million housing starts this year and 1.45 million for 2008.
"Is this ball still rolling downhill? I think it is. When will it start rolling back up? We still have affordability issues. ... We are trying to weave our way through this," he said.
Seiders said that home remodeling also will take a hit with a 5% to 6% decline over the next year before positive growth comes in 2009. And home prices still are going down with an 8% to 10% drop overall, he added.
July 26, 2007
BY GRETA GUEST
FREE PRESS BUSINESS WRITER
The nation's housing market hasn't seen the bottom of its current cycle and probably won't until the end of the year, according to the chief economist for the National Association of Home Builders.
David Seiders said Wednesday that the housing market has been weaker in the first half of the year than he predicted late last year.
"The key reason is the unanticipated and sudden turmoil we encountered in the subprime market earlier this year," Seiders said.
That has meant tighter lending standards and fewer buyers able to purchase new homes. And the rising wave of mortgage delinquencies and foreclosures has added to the problem.
"We are still dealing with those problems, and those cause massive uncertainty about where we are going," Seiders said.
Few markets have been spared from the housing downturn, he said. For example, Michigan is one of five states that have dropped the most since the first five months of 2005.
Seiders said single-family permits were down 60% in Michigan during the first five months of this year compared with the first five months of 2005. That compares with a nationwide drop of 31% in those permits in the same period.
"Michigan is probably getting back into the growth range," he said.
Housing is expected to pick up nationwide next year, he said. Seiders expects 1.42 million housing starts this year and 1.45 million for 2008.
"Is this ball still rolling downhill? I think it is. When will it start rolling back up? We still have affordability issues. ... We are trying to weave our way through this," he said.
Seiders said that home remodeling also will take a hit with a 5% to 6% decline over the next year before positive growth comes in 2009. And home prices still are going down with an 8% to 10% drop overall, he added.
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