Home / Daily Dose / Housing Outlook Stays Positive Despite Predicted Moderate Economic Expansion
Print This Post Print This Post

Housing Outlook Stays Positive Despite Predicted Moderate Economic Expansion

HandGrabbingHouseThe Conference Board’s Leading Economic Index (LEI) declined by two basis points in its latest reading after holding steady in both July and August, but analysts predict that economic growth will still continue but at a moderate pace.

The LEI, a measure of economic developments as an indicator of future trends that tracks a handful of component indicators, including labor market conditions, housing construction activity, and credit conditions, read at 123.3 (2010=100) for September. That reading represented a decline of 0.2 percent after holding steady in both July and August. Still, Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board, said he expected economic expansion to continue, but at a moderate pace.

“The recent weakness in stock markets, the manufacturing sector and housing permits was offset by gains in financial indicators, and to a lesser extent improvements in consumer expectations and initial claims for unemployment insurance,” Ozyildirim said. “The U.S. economy is on track for moderate growth of about 2.5 percent in the coming quarters, despite the mixed global economic landscape.”

“Along with the good outlook for jobs and household incomes that should be positive for the availability and affordability of housing.”—Ataman Ozyildirim

The predicted moderate economic expansion does not change the Conference Board’s outlook for housing, which is largely positive. Ozyildirim told DS News earlier in the week that, “The single family housing market seems to be heating up, despite some potential volatility. Construction companies and workers are busy while home prices and mortgage rates remain favorable.”

On Thursday, Freddie Mac announced a decline of 3 basis points for 30-year fixed mortgage rates down to 3.79 percent. Also on Thursday, the National Association of Realtors reported that existing-home sales for September had rebounded from August’s decline and have now increased year-over-year for 12 consecutive months.

“That moderate (economic growth) probably means that the interest rates will not pick up significantly soon,” Ozyildirim said. “Along with the good outlook for jobs and household incomes that should be positive for the availability and affordability of housing.”

The LEI report for October comes a month after the Bureau of Economic Analysis’ third estimate for GDP growth for Q2, which exceeded all expectations with reports of 3.9 percent GDP growth. The rate of growth for Q1 was only 0.6 percent.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
x

Check Also

RoundPoint Moves Headquarters

RoundPoint Mortgage Servicing Corporation, a fully-licensed agency and non-agency subservicer of residential mortgages, has announced ...

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.