Nationwide says that the rebound from the Great Recession has been weaker than previous recoveries
The housing market peaked 2 years ago according to Nationwide, but it still thinks that there are positives ahead.
Despite challenges, the firm’s Health of Housing Markets Report calls for a continuation of elevated levels of existing home sales.
"While we may be past the peak, all signs are pointing to continued elevated sales despite the inventory of available homes remaining tight," said David Berson, Nationwide senior vice president and chief economist. "Slower house price gains and falling mortgage rates have significantly improved housing affordability while consumer incomes have accelerated — putting a home purchase within reach for more homebuyers."
Nationwide’s report notes that the recovery of the US housing market since the Great Recession has not been as robust as previous post-recession rebounds.
Even as existing home sales as a share of households finally climbed above the long-term median after about five years of economic growth, it has not come close to the heights seen during several prior economic expansions.
The report says that tighter mortgage lending standards, especially early in the post-recession expansion, is a reason for the slower recovery and, even though lending standards have loosened in recent years, mortgage credit availability is tighter now than it is estimated to have been prior to 2000.
Sustainable market
The housing market will continue to be supported by household growth, solid job gains and low delinquency rates.
Nationwide’s Leading Index of Healthy Housing Markets shows that the most positive outlooks are for: Beaumont-Port Arthur, Texas; Trenton, N.J.; Vineland-Bridgeton, N.J.; Montgomery County, Pa.; Pittsfield, Mass.; Sumter, S.C.; Sebastian-Vero Beach, Fla.; Hinesville, Ga.; Waterloo-Cedar Falls, Iowa; and, Atlantic City- Hammonton, N.J.
Meanwhile, the least positive outlooks are for: Kennewick-Richland, Wash.; Yakima, Wash.; San Jose, Calif.; Mankato-North Mankato, Minn.; Bowling Green, Ky.; Odessa, Texas; San Rafael, Calif.; Pueblo, Colo.; Cheyenne, Wy.; and, Kahului-Wailuku, Hawaii.
