Last week, Fannie Mae shared good news on the housing front.
Fourth quarter 2011 sales activity is creeping up.
140,000 private sector jobs added in November 2011 may add to more optimism and willingness to invest in housing in 2012.
Questions persist though as to whether these events are blips or trends. Fannie Mae’s chief economist, Doug Duncan, is quoted in Housing Wire saying ”It’s important to recognize that we’re ending 2011 on a stronger note than we’ve seen throughout the year. Unfortunately, however, our 2012 outlook is not as rosy as our forecast for the fourth quarter of 2011. Despite recent near-term improvement, the housing market will likely remain subdued next year — a reflection of the winter season, an expected slowdown in economic activity, and a potential increase in distressed sales,” according to Duncan. “Moreover, we expect that the country’s fiscal problems will be hotly debated over the coming year and will weigh on the market.”
Our take on this is this. 2012 will offer continuing opportunities for home buyers who feel secure in their employment situation. Historically low interest rates will be available to those who have good credit and motivation. As employment continues to improve, 2013 will likely mean more buyers in the market starting to create demand levels we have not seen in five years. Demand will bring up values which will improve optimism. As optimism increases many good things will occur. Housing leads the economy, so the best opportunities are prior to full blown optimism returning.
The conclusion: 2012 may be the last year for a while where the supply of housing keeps prices and rates low. If you are considering purchasing, watch the job market closely as this is where optimism starts, and housing values will increase thereafter.
Tags: Fannie Mae, Housing Market, Wilmoth, Wilmoth Group
