Despite strong signs of recovery, the level of housing activity remains near historic lows, according to the February housing outlook by Freddie Mac.
Reports of low home prices, low mortgage rates and modestly rising income indicate that there is room for sustainable growth in the year ahead.
Additionally, residential-fixed investment made positive contributions to GDP growth for the first time since 2005, adding 0.4% to growth in the fourth quarter.
“The macroeconomic recovery though 2011 helped to forestall further erosion in the depressed housing market. In return, housing is now ’showing some love’ by contributing to economic growth, perhaps by adding close to 0.5 percentage points to 2013 GDP growth,” vice president and chief economist Frank Nothaft of Freddie Mac said.
Housing starts in 2013 are projected to increase to 950,000 units, a 22% increase from 2012. Looking even further ahead, Freddie Mac economists are forecasting another 26% in annual starts in 2013, bringing the total to about 1.2 million.
As incomes continue to pick up, so will home prices. The housing price recovery should have a direct effect on sales, as homeowners who have been forced to wait are now able to get back into the market.
Nothaft added, “Across the nation, most local housing markets have room for sustainable growth, particularly in home construction and sales. As the broader economy heals, expect to see more good news with house prices continuing their recent upward trend, and home sales and housing starts continuing to post strong growth rates.”
California Housing Markets See Some Normalcy
After stealing the spotlight for several months, it seems like the California recovery is plateauing at normal levels, according to recent data reported by HousingWire.
The month of January showed a 27.4% drop in sales from the month before, down from 39,760 to 28,871. Last month’s sales were still 2.7% above the numbers from a year earlier. It is normal for sales to drop from December to January. However, January’s sales were 8.7% below the average of 31,607 sales for all months of January since 1988.
Here is a peak at OpenOffer.com’s San Diego MarketWatch data from Friday afternoon:
- 106 New Homes for Sale in San Diego County in the past day
- Average Asking Price went by 0.9% to $1,014,444 from prior week
- 49 Homes Sold in San Diego County in the past day
- Average Sold Price went down by 0.1% to $449,546 from prior week
The median price paid for a California home dropped also, down 3% from $299,000 in December to $290,000.
Of the total number of homes sold in January, 18.7% were foreclosed on over the past year. This number is up from December when 15.8% of homes sold were foreclosures.
This is filed under National Markets.