Speculation Offsetting Downside Factors in Housing

By: Monday October 8, 2012 11:15 am

We have heard so much about the positive prospects for housing over the past year, I thought maybe we should pay some attention to the downside case. Michael Panzner provides it, and it hinges mainly on the high supply of shadow inventory and the type of loans being offered these days:

Low Rate of Household Formation Hurting Housing Market

By: Thursday June 21, 2012 7:11 pm

A new report by the US Census shows why it’s going to be so difficult to get a housing recovery going. We already have seen that the 9 million families locked out of the market by virtue of a recent delinquency or foreclosure dampens supply. The up to 16 million families who are underwater have almost no chance at being “step-up” buyers, purchasing a bigger home or a home closer to a new job. The only way to generate demand, then, would be to have a run of first-time homebuyers with good credit, typically young people just getting into the housing market. But the Census report shows that household formation just isn’t happening these days.

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