Analysts say that the housing market has not recovered yet and that it will be next year before any improvement is seen.
The outlook for the home market dimmed this week as residential construction and mortgage applications fell and loan delinquencies reached a record.
"I don't think the housing crisis is over," Mark Zandi, chief economist with Moody's Economy.com, said in a telephone interview. "I think we’re going to see another leg down."
New home sales may begin to pick up by the start of the so-called spring selling season, said Toll Brothers Inc., the largest U.S. luxury homebuilder. Existing house sales may take longer. Residential construction and property sales led the way out of the previous seven recessions going back to 1960, said David Berson, chief economist of PMI Group, the mortgage insurer in Walnut Creek, California.
Mortgage applications for home purchases fell to a 12-year low last week and foreclosures rose to record highs in the third quarter, according to reports from the Mortgage Bankers Association.
An index measuring November homebuilder confidence came in lower than the median forecast of 45 economists this week. The Commerce Department on Nov. 18 said residential building dropped 11 percent in October to the lowest level since April’s all-time bottom.
Unemployment is at a 26 year high, which is driving more homeowners into foreclosure and keeping new mortgage applications low. The U.S. has lost
7.3 million jobs since December 2007. That is a record number not seen since the Great Depression.
Housing starts jumped 22% in February as work began on 583,000 homes and apartments.
Work began on 583,000 homes at an annual rate, a 22 percent increase from January that was propelled by a surge in condominiums, apartments and townhouses, Commerce Department figures in Washington showed today. A separate report showed gains in producer prices slowed, underscoring a lack of inflationary pressures with the economy in a recession.
"It's a bit too early to get too excited, but we are nearing the bottom in housing," said Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis, who had forecast an increase in starts.
Housing is still down nearly 50% from one year ago and the increase is only expected to be temporary but it added a bit of optimism to the housing industry, which has been hit very hard during the recession.
