Whatever deficit reduction might be realized by cutting the mortgage interest deduction would come at an intolerably steep price: trillions of dollars in wealth destruction and a new uncertainty in what has long been recognized as a bedrock of our economy.
With the home buyer tax credit ended and the housing market now largely on its own, how can we expect the real estate market to perform? In the near term, we’ll probably see home sales slide measurably lower. By the third quarter, it will be up to job creation and consumer confidence to bring in buyers.
One factor that should help the market is the improving...
In the current market, the idea of a housing shortage may be hard to accept. There are simply too many For Sale signs and delinquent mortgages threatening to turn into foreclosures to make a housing shortage seem like a serious possibility.
But the big drop in home construction over the last few years suggests that it could become a real issue.
Decisions about what to buy and when—by consumers and by businesses—inevitably lead to market fluctuations that sometimes can be forecast and sometimes not.
We see this volatility in the spectacular surge in home sales that closed last November when households believed the home buyer tax credit was about to expire, and then in the subsequent drop in sales over...
The extension and expansion of the home buyer tax credit can be counted on to help home sales throughout the first half of this year, but how will markets fare after the credit expires on April 30 (with deals having until June 30 to close)?
The health of housing for the second half of the year is dependent on jobs, and on this point the picture is mixed. Although we expect...
For the first half of this year home sales will improve by more than 20 percent over the same period of 2009. That means we could see a sales pace of more than 5.7 million by June, a much welcomed improvement from the last few years.
The home buyer tax credit is playing a big role in that gain. By the time it expires in June 2010, I expect that some 4.4 million households...
If 2009 was the year of economic recovery, 2010 will be the year of growth. Thanks to solid gains in the lower end of the housing market, the first-time home buyer tax credit, and the rebounding stock market, lenders in mid–2009 began cautiously lending money beyond the safe Fannie Mae, Freddie Mac, and FHA loans on which they relied for income during the credit crunch.
Yes, we’re pulling out of the recession and better economic conditions lie ahead. Continuing the home buyer tax credit and relieving the commercial real estate credit crunch are what we need to bring those lost jobs back and keep the economy growing.
More broadly, there are other indications the economy is heading up. Thanks to promising signs, we forecast higher home sales and stabilizing prices in the year ahead. But there are still some concerns.