Housing Slump Could Linger

Housing Slump Could Linger

 

Economists are giving up on the idea that the U.S. housing slump will be quick and relatively painless.

 

Instead, more are concluding, the downturn that began nearly two years ago will last at least through the end of 2007, remaining a major drag on the U.S. economy. The culprits: a glut of homes for sale and growing caution among lenders who now regret being so free with their mortgages during the boom.

 

Most forecasters still expect the economy to regain some momentum this year after a slow first quarter. Recent data have shown manufacturing, business investment and trade on track to help offset the negative effects of falling home values on consumer spending. Even so, some economists expect economic growth this year to remain tepid, largely because of the weak housing market.

 

Some local markets remain strong, but in much of the country, home prices have been flat to moderately lower over the past year.

 

The outlook is confusing for the average home shopper, too.  Lenders have eliminated most no-money-down "subprime" loans for people with weak credit records. That means many people who hoped to buy homes this year will have to wait until they can clean up their credit records and save for a down payment.

 

If all the news of the housing slump has you confused about what to do and when to do it, give us a call or leave us a comment below.  We'll be happy to discuss your individual options with you, and help you determine whether now is the best time for you to look at real estate or not.