Needless to say, when Mark Zandi said earlier this year that housing would find a bottom in 2009, I didn’t count myself as one of the believers.
After all, as I had written time and time again, the bottom in housing was nowhere in sight.
In fact, in this article, I suggested why his forecast was on the optimistic side explaining why a bottom in 2010 would be much more likely.
Now as it turns out, even Zandi now admits he may have jumped the gun on this one.
Here’s the story on that score from Bloomberg.
It’s in an article by Kathleen M. Howley and John Gittelsohn entitled: U.S. Housing Recovery Delayed to 2010 as Market Wanes
“A recovery in U.S. housing will have to wait at least until next year.
The outlook for the home market dimmed this week as residential construction and mortgage applications fell and loan delinquencies reached a record.
“I don’t think the housing crisis is over,” Mark Zandi, chief economist with Moody’s Economy.com, said in a telephone interview. “I think we’re going to see another leg down.”
Mortgage applications for home purchases fell to a 12-year low last week and foreclosures rose to record highs in the third quarter, according to reports from the Mortgage Bankers Association.
An index measuring November homebuilder confidence came in lower than the median forecast of 45 economists this week. The Commerce Department on Nov. 18 said residential building dropped 11 percent in October to the lowest level since April’s all-time bottom.
The $8,000 federal tax credit for first-time buyers, extended by President Barack Obama on Nov. 6, drove existing home sales to a two-year high in September. At the same time, a 26-year high in unemployment is keeping many buyers out of the market and pushing existing owners into foreclosure.
“The thing that drives our business the most is job creation,” Donald Tomnitz, chief executive officer of D.R. Horton Inc., said today on an earnings call. “If we look at the macro economic environment, it’s not good for us.”
U.S. companies have shed 7.3 million jobs since December 2007, the biggest contraction since the Great Depression, and the unemployment rate jumped to 10.2 percent in October, the highest since 1983, according to the Bureau of Labor Statistics.
The jobless rate probably will peak at 10.4 percent in 2010’s first quarter, even as the U.S. economy continues an expansion that began in the third quarter, said Douglas Duncan, chief economist of Fannie Mae, the largest mortgage financier.
“You don’t pay a mortgage with economic output — you pay a mortgage with a paycheck,” Jay Brinkmann, MBA’s chief economist, said yesterday.
Existing home prices probably will fall 12 percent this year to a median of $173,800, while the new-home median likely will tumble 8.7 percent to $212,000, according to a forecast on Fannie Mae’s Web site.”
Now I wonder if Jim Cramer will come clean on his bottom call…I’m not going to hold my breath on that one.
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