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Housing outlook: bad and getting worse
The nation’s lousy housing market is still weakening, economic reports suggested Tuesday.
First, Standard and Poor’s S&P/Case-Shiller Home Price Index showed that home prices fell in the second quarter by a record 3.2 percent from a year earlier. Later, David Seiders, chief economist for the National Association of Home Builders, told reporters on a conference call that demand for new homes is declining faster than he expected just a month ago.
Builders are constructing houses at an annual rate that will fall to about 1 million by early next year, he said. In early 2006, homes were being built at an annual rate of 1.75 million. He labeled that a “stunning contraction.”
Seiders, who wants the Federal Reserve to cut interest rates, said he doesn’t expect the outlook to improve until next year, and full recovery won’t come until 2011. At this point, he said, he is just “hoping for stabilization.”
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