Here goes a phrase I didn’t think I'd say anytime soon: The economy is weak, but housing remains a bright spot.
That's according to Fannie Mae's July economic and housing outlook report.
"Despite signs of deteriorating momentum for economic activity, housing continues to be a bright spot as news from the housing market has been relatively upbeat, presenting a rare upside boost to the economy," says Doug Duncan, Fannie Mae chief economist.
Consumers are spending less, and consumer confidence has reached one of the lowest levels this year. The job market is still terrible, and the European debt crisis remains a concern, Fannie's report says. Believe it or not, the silver lining is the housing market.
Home sales and construction of new single-family homes will continue to increase this year, according to Fannie's forecast: "We expect housing starts to rise by 22 percent and total home sales to increase by 9 percent in 2012. Home prices for 2012 overall are now projected to be above last year’s depressed levels, compared with a slight decline in the previous forecast."
Potential homebuyers also are more optimistic about the market.
From the report:
The share of consumers who say they would buy if they were going to move increased by 6 percentage points to the highest level seen in the survey’s two-year history. At the same time, 35 percent of respondents believe that home prices will go up in the next 12 months, with an average rise of 2 percent -- also the highest level recorded since the survey began in June 2010.
But the situation isn't rosy for everyone, especially for homeowners who live in areas where home prices continue to decline.
Home prices are still falling in about half of 1,166 counties for which CoreLogic reports overall house price indexes, according to a post on the Federal Reserve Bank of New York's blog, called Liberty Street Economics.
From the blog:
"Roughly half of the counties have measured house prices that are still declining, while half have stable-to-rising prices," the post reads. "In contrast, at the height of the housing market crash, more than 75 percent of the counties were experiencing falling house prices."
What's the housing market like in your area?
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