Home Prices by ProQuest


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									    M A R K E T OV E RV I E W

           Outlook Slow for                                                                                                                                            or half of all U.S. households — can afford
                                                                                                                                                                       today’s $200,000 median-priced new home,
                                                                                                                                                                       according to figures released by the National
                                                                                                                                                                       Association of Home Builders (NAHB).

           Remainder of ’09
                                                                                                                                                                           “That’s an increase of 17 million house-
                                                                                                                                                                       holds from conditions just two years ago and
                                                                                                                                                                       the best housing affordability number we
                                                                                                                                                                       have seen in years,” said NAHB Chairman
           Falling home prices and sagging consumer confidence take toll                                                                                               Joe Robson, a home builder from Tulsa,
                     eductions in the amount spent on high-                                    industry will recover until consumers have more                             Based on data from the U.S. Census

               R     end home improvement projects contin-
                     ue to hinder remodeling activity accord-
                                                                                               confidence in the housing market.”
                                                                                                   “Lower financing costs are beginning to
                                                                                                                                                                       Bureau comparing home prices, mortgage
                                                                                                                                                                       rates and minimum income needed to pur-
           ing to Harvard’s Joint Center for Housing Studies.                                  stabilize the downturn in existing-home sales,                          chase a median-priced home in February
           For 2009, the Leading Indicator of Remodeling                                       as they also are reducing the cost of financing a                       2007 and February 2009, a typical family
           Activity (LIRA) points to homeowner improve-                                        home improvement project” notes Kermit Baker,                           today can purchase a house with $20,000 less
           ment spending declining around 12 percent.                                          director of the Remodeling Futures Program of                           in household income and save nearly $500
               The LIRA measures and projects only a                                           the Joint Center. “However, they have not been                          per month on their principal, interest, taxes
           portion of the U.S. home improvement mar-                                           enough to offset rising unemployment and fall-                          and insurance. The number of households
           ket, however. It no longer includes spending                                        ing consumer confidence and encourage home-                             that can afford to purchase a home today is
           on maintenance and repair because the U.S.                                          owners to undertake major home improvement                              55.4 million, compared with 38.4 million
           Census Department stopped collecting that                                           projects,” cautions Baker. |                                            two years ago, according to figures compiled
           data for its C-50 report last year. Spending on                                                                                                             by NAHB.
           rental and vacation property, likewise, is not
           reflected by the LIRA.
                “The weak housing market and the nation-                                       Affordability
           al economic recession continue to take their toll                                                                                                           Home Prices
           on remodeling,” explains Nicolas P. Retsinas,                                       Home Buyers Returning
           director of the Joint Center for Housing                                               Thanks to record low mortgage rates and                              S&P/Case-Shiller Indices Decline
           Studies. “It looks increasingly unlikely that this                                  declining home prices, 55 million families —                                Data through January 2009, released by
                                                                                                                                                                       Standard & Poor’s for its S&P/Case-Shiller
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