Housing recovery to wait, association says
Don’t expect the U.S.
housing market to get better anytime soon, an economist says.
Don’t expect the U.S. housing market to get better anytime soon, an economist with a cement industry trade group said.
Edward J. Sullivan, chief economist for the Portland Cement Association, said a meaningful recovery in home sales and construction will not take place until mid-2010.
Sullivan expects another major upswing in foreclosures as homeowners who took out unconventional adjustable-rate mortgages, such as those without income verification requirements and with optional minimum payments, see interest rates reset.
“Housing construction activity cannot begin until sales recover,” Sullivan said. “Increased foreclosures, coupled with deteriorating labor markets and tight credit conditions, will delay significant sales activity until mid-2010. Improvements in housing starts are not expected to be significant until 2011.”
And although the efforts of the federal government and many banks to rewrite so-called toxic mortgages is expected to help, much more is needed, Sullivan said, adding things could get worse.
“Without further government cash injections into the banking system, tight lending standards could characterize the economy and mortgage lending through mid-2011 dragging down home sales,” Sullivan said. “Under such a scenario, the housing recovery and overall economic recovery could be delayed significantly.”
Don’t expect the U.S. housing market to get better anytime soon, an economist with a cement industry trade group said.
Edward J. Sullivan, chief economist for the Portland Cement Association, said a meaningful recovery in home sales and construction will not take place until mid-2010.
Sullivan expects another major upswing in foreclosures as homeowners who took out unconventional adjustable-rate mortgages, such as those without income verification requirements and with optional minimum payments, see interest rates reset.
“Housing construction activity cannot begin until sales recover,” Sullivan said. “Increased foreclosures, coupled with deteriorating labor markets and tight credit conditions, will delay significant sales activity until mid-2010. Improvements in housing starts are not expected to be significant until 2011.”
And although the efforts of the federal government and many banks to rewrite so-called toxic mortgages is expected to help, much more is needed, Sullivan said, adding things could get worse.
“Without further government cash injections into the banking system, tight lending standards could characterize the economy and mortgage lending through mid-2011 dragging down home sales,” Sullivan said. “Under such a scenario, the housing recovery and overall economic recovery could be delayed significantly.”
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