Newspaper article Sarasota Herald Tribune

Modest Growth Forecast for 2012

Newspaper article Sarasota Herald Tribune

Modest Growth Forecast for 2012

Article excerpt

ORLANDO -- The national housing market will mount a modest recovery in 2012, a prominent industry analyst told builders gathered here Wednesday.Speaking at the International Builders Show, David Crowe says the data on home starts, gross domestic product, employment, consumer confidence and other economic indicators include "grains of positive news.""Given that we have been up and down, only through that collection of data can we say we have a little more solid market," said Crowe, the chief economist of the National Association of Home Builders.Home builders, the foot soldiers of the industry, have intimate knowledge of buyer demand, so their confidence level is a key indicator of market health. It is improving, Crowe said, up 11 points to an index of 25 on a scale of 0 to 100."Builder confidence is showing some life," Crowe said. "It had been in the mid-teens after being in the 70s in the middle of the past decade."The three-month moving average of housing starts has improved the past eight months, but 2011 was the worst year for starts since 1942, when record keeping began, so this is a case of the gutter looking like "up.""It is improving, but it is not going to be great," Crowe said. "We are so far down we almost have to see some improvement."Once-hot states like Florida, California, Arizona and Nevada "will improve from that hole at about the same pace. They will inch their way up, but have a longer distance to go."Frank Nothaft, a Freddie Mac economist, took an optimistic tone when he started by saying, "Home-buyer affordability is sky high. Interest rates are dirt cheap, and that is driving affordability."It is off the charts -- the most affordable market in decades," he said.But mortgage qualifying is "ridiculously tough" and a lack of consumer confidence is a "headwind" that is pushing back on home sales. …

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