Home Price and Demand Forecast

Home Price and Demand Forecast

Average home prices are expected to stay flat through about the middle of next year.  By then, builders will have curtailed supply enough to allow the current overhang of about 300,000 houses nationwide to start to be absorbed by the market.

Still, some analysts predict, sellers will face a dismal spring next year, usually the best selling season.

Housing will play a big part in slowing job growth. Next year, net employment growth will slacken to an average of 117,000 a month.  Home building and related fields…mortgage finance, furnishings, design, landscaping, etc…have made up 25% of overall job growth since 2002.

The housing cooldown will have a broader reach than was expected just a few months ago. Then, it seemed that the bulk of the downturn would be restricted to former boom areas, located mainly on the coasts.  But sluggishness in some industries, especially the auto industry, is taking its toll on some inland areas, notably Indiana, Michigan, Ohio and parts of Pennsylvania and New York.

By late 2007, homeownership is expected to resume its historical role as a relatively secure store of value that also provides shelter.