WSJ: US Home Market in ‘Prolonged Bottom’

Tuesday, 01 May 2012 07:11 AM
By Dan Weil

The U.S. housing market appears to have hit bottom, but hasn’t staged much of a rebound yet, making this period “a prolonged bottom,” according to The Wall Street Journal.

“A full-fledged recovery is still years off for many housing markets — as well as for millions of people who purchased homes or took cash out during the bubble,” the Journal reports.

On the plus side, new home construction should increase 24 percent this year from 2011’s record low, according to Zelman & Associates.

Sales of new and previously-owned homes also are showing impressive gains. Home prices

continue to slide, but at a slower rate than before.

The S&P/Case-Shiller home price index dropped 3.5 percent in February from a year earlier, the smallest drop since February 2011.

Probably the biggest problem for the market is foreclosures that loom ahead. Banks owned about 450,000 properties as of March 31, but there were another 2 million loans in some stage of foreclosure.

"That'll be like a ball and chain," Mark Fleming, chief economist at CoreLogic, tells the Journal. "It won't prevent a recovery, but it could drag it out over several years."

Others see a long, hard slog for housing too.

“Mortgage rates are very, very low, but you really need to see strong job growth,” Scott Brown, chief economist at Raymond James, tells Bloomberg. “It’s still a very long way to go before we get a full recovery.”

WSJ: US Home Market in