Will 2012 See a Housing Turnaround?
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Despite mixed results in the housing sector, many homebuilder stocks are outperforming the overall market by a large margin.
A new report released Thursday showed that U.S. housing starts in December were worse than expected, posting a 4.1 percent decline after rising 9.1 percent in November.
On the other side of the spectrum, the National Association of Home Builders (NAHB) announced last week that its housing market index beat expectations and rose to its highest level in 4 and a half years.
Following last week’s positive news, the PHLX Housing Sector Index closed at an 11-month high of 117.56.
Could all this be perceived as the dawn of a recovery for the country’s battered housing market?
The verdict is still out. Confidence remains low from a historical perspective, although the numbers show the HGX is off to its best start ever this year — up more than 14 percent.
Nonetheless, the HGX has ended four of the past six years in negative territory, witnessing its worst loss in 2008 when the index closed down more than 40 percent. Will this be the year of a turnaround in housing?
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“Will 2012 See a Housing Turnaround?” was provided by CNBC.com.
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3 Comments so far
leave a commentDepends on the area you are in. Here in DC the market has been growing (slowly) for 3 years now but other areas are hurting badly. I’d still say that we see a pick up in housing this year with the Fed’s promise to keep rates low which is a confidence boost for consumers.
I doubt the housing market will return — I heard on NPR that used housing inventory is still very incredibly high.
The speaker’s thesis was as follows:
1) The bursting of the housing bubble was what caused the recession
2) There are still enough houses for people to buy, so New Housing Starts (and the accompanying economic activity) isn’t expected to increase very much.
3) So, there won’t be a housing boom any time soon to lift us out of the recession.
I need to find a link show so that I can listen to its entirety; she was a rather insightful speaker. I think the show was the Left, Right, & Center for 1/28/2012, but I’m not sure. If I find it, I’ll try to post a link.
I hope the housing market turns around! It seems unlikely, but any positive upturn in the housing market will help the economy greatly.