RISMEDIA, November 18, 2009 - Aided by the home buyer tax credit, the outlook for housing and the economy appears headed for a sustainable recovery, according to the National Association of Realtors. (NAR)
Lawrence Yun, NAR chief economist, said the projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. "Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stablilize home prices," he said. "In fact, the credit is working better than first projected - it now looks like we'll have 2.3 to 2.4 million first-time buyers this year."
The 2009 NAR Profile of Home Buyers and Sellers, shows first-time buyers accounted for a record 47% share of home sales over the past year, up from 41% in the 2008 survey. The share has risen steadily since a cyclical low of 36% in 2006.
Existing home sales are expected to total 5.01 million in 2009, a gain of 2.0% over last year, and then are forecast to rise 13.6% to 5.69 million in 2010. "A steady draw down of inventorywill help home values to turn positive in 2010, but risks such as unemployment remain in the economy," Yun said.
New home sales are projected at 397,000 this year, recovering to 549,000 in 2010. Housing starts, including multifamily units, should total 564,000 units this year but grown to 752,000 in 2010.
"We've seen a steady downtrend in housing inventory for well over a year and home prices appear to be in the early stages of stabilizing. With the expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5% in 2010, but with wide geographic differences," Yun said. He expects growth in the U.S. gross domestic product to be at a pace of 2.5% in the current quarter, with GDP up 2.8% in 2010.