… Yes, you read that right! The National Association of Realtors chief economist, Lawrence Yun, predicts a 2% overall increase in home prices next year. And a 4% increase in the number of sales.
For 2013, he projects sales to pick up another 6 percent and prices to rise another 3 percent.
Ahem. That’s a change from the ‘gloom and doom’ that we have become accustomed to hearing.
Yun says that rather than continuing to head down, home prices have been stable for the last two years and are poised to head up, which will reduce lending risks, lower foreclosures, boost sales, and further strengthen the market.
To show that home prices have been stable, Yun cited both NAR and Case-Shiller data, which show prices have been hovering around a $140,000 national median since 2009.
Yun characterized today’s market as “strange” because of this disconnect between the good buying conditions and the low sales growth.
Rock-bottom consumer confidence is a big part of the weak market.
Lenders still profiting…
The hurdles to borrowers imposed by lenders through stringent underwriting requirements are a major issue. Lenders are requiring applicants to have credit scores of about 760 for Fannie Mae and Freddie Mac loans, and just under 700 for FHA loans, shrinking potential home sales by about 20 percent.
These stiff requirements come at a time when banks are seeing strong profits… ‘strange’ indeed.
Banks profited during the ‘bubble-time’ they largely created, and now are doing the same in the ‘oops-bubble-popped’ era.
Modest Volume, Price Gains Seen Next Year, November 2011