Sep 06
7
US Economy – Housing Correction
The correction in the housing market is starting to be noticed by a large group of US economists now.
The Wall St Journal has a story in it today about the future of housing prices:
“The housing correction is just in its early stages
now,” said Joseph Carson of AllianceBernstein, who forecast a 5%
decline for 2007. “Existing home prices have come down to no-change on
a year-to-year basis. For new homes, prices are below year-ago levels
when you include added features. The prices will have to go lower to
give demand a lift in short term.”
Mr. Carson expects broad-based difficulties throughout
the nation. “Affordability is an issue across the board,” he said,
adding he believes a major correction is inevitable. “It's pretty clear
now that national home prices will drop to correct housing imbalances,”
said Scott Anderson of Wells Fargo & Co.
The general consensus is that the economy will keep on rolling without any let up, and let's face it that is the amazing thing about America. As an economic engine it is like no other. Momentum plus.
The story also says:
comes to politics. When asked which outcome of the midterm elections
would most increase chances of legislation to reduce the long-term
budget deficit, 14 answered Democratic control of both houses of
Congress, while 14 said Republican control of both chambers. Ten said a
split Congress would be most effective in trimming the deficit.
new jobs a month will be added to nonfarm payrolls over the next year.
That is the lowest forecast since the question was first asked in June
2005, and represents the sixth consecutive drop in the estimate. They
expect the unemployment rate to rise slightly to 4.8% by November, up
from the 4.7% level reported by the Labor Department for August. The
rate is seen at 4.9% in May 2007.
prices. On average, the price of crude was seen declining to $66.95 a
barrel by December, compared with an expectation last month of $69.50.
It was the first time the forecast was lowered since March. The price
of crude is expected to fall to $63.91 by June 2007.