logo
  Join        Login             Stock Quote

Five Reasons 2012 Will Be The Start Of US Housing Recovery

 January 13, 2012 02:07 PM
 


As we await the fully anticipated downgrade of France as well as Austria and others in the eurozone before the long weekend, it is difficult to think positive thoughts about the US housing market. But at the risk of getting bombarded with more angry emails, here are five reasons 2012 will be the year the US housing market will start recovering.

1. Housing inventory levels have tightened considerably:

A. Existing homes for sale number is near the long-term average after the revision.

Single Family home sales (millions, annualized, source: Capital Economics)

B. The number of unsold homes (new and existing) as a fraction of the population in the US is at a 7-year low.  As household formation picks up, so will the demand for homes.

Total number of unsold homes as % of population (Bloomberg)

C. Housing starts continue to stay subdued with only limited inventory added.

Single family housing starts (Bloomberg)

2. Home sales are stabilizing in spite of QE2 ending last summer.

Existing home sales (Bloomberg)
3. Downpayment required on new mortgages is back down to 20% versus around 25% in 2010.
Loan-to-value on new mortgages (Capital Economics)

4. New mortgage payment affordability is now at best levels in recent history.

New mortgage monthly payment as % of median income (Capital Economics)
5. The market is telling us recovery may already be under way.  The chart below shows the share price history of Hovnanian Enterprises, a company that builds single-family homes. The market is anticipating improved demand for homes.

HOV share price vs SP500
iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageWill The Real U.S. Market Please Reveal Itself?

Is it the small stock Russell 2000, in a pattern of rally attempts failing at lower highs since its March read on...

article imageTime To Chase Bill Gross?

Jason Zweig at the Wall Street Journal had a very good piece on whether to follow Bill Gross as he goes read on...

article imageA Bullish Sign For Uranium Could Send This Stock Soaring

On March 11, 2011, a massive 9.0-magnitude earthquake erupted about 45 miles east of the Japanese coast. read on...

article imageBanks' LCR-based Demand For Treasuries Moderates

One of the factors contributing to treasury market's strong performance this year has been the Liquidity read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.