Despite Increase in Sales, Weak Outlook for US Housing Market (Video)
Thursday, December 23, 2010
Source: Fox News
Fox News reports: While there’s been some encouraging news with rising new home sales, the numbers are just barely higher than all-time lows. According to Dr. Sam Chandan, Chief Economist with Real Capital Analytics, the U.S. government’s programs to help residential transaction activity have met with little success so far.
With a 5.5% increase in the sale of new residential properties, the U.S. Department of Commerce projected a seasonally adjusted annual rate of 290,000 units sold. Given the size of the U.S. economy, economists generally consider an annual rate of 600,000 new home sales to be desirable.
“We know that low mortgage rates are not a sufficient condition… we need real, meaningful and sustained job growth” said Chandan.
He saw Internet businesses deriving greater benefit than "brick and mortar" retailers from the modest increases in consumer spending. He noted that the rise in spending is part of the impact of tax cuts: “some of those income-constrained families really being able to take advantage of a few extra dollars in their pocket to buy more necessity goods in 2011," Chandan said. "Whether or not that is going to really spur the kind of job growth that will lead to long-term and sustained improvements in the trajectory of the economy, I think that is an area where we have to be a little bit more reserved in our expectations."
View the full article on Fox News: Despite Increase in Sales, Weak Outlook for US Housing Market (Video)
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