Wells Fargo has upgraded its outlook on the housing market in its April forecast, thanks to modest upswings in consumer confidence and home prices nationwide.
Wells Fargo has upgraded its outlook on the housing market in its April forecast, thanks to modest upswings in consumer confidence and home prices nationwide. The forecast, released jointly with NAHB, projects continued recovery through the rest of 2012. They do caution, however, that a full recovery could still be years away.
The increase in consumer confidence, says the report, largely stems from rising employment nationwide; this in turn leads to greater consumer spending, which drives confidence even higher.
The spring selling season seems off to a good start, particularly in states like Florida, Arizona, and Nevada, where overbuilding and speculation were especially pronounced. In fact, prices fell so dramatically that potential retirees — the largest group looking to move to those states — have been able to purchase new homes without having to sell their old ones first. This has led to prices rising again, spurring the housing markets in those areas.
Housing in the Sun Belt has also seen a modest turnaround, largely driven by economic policy, particularly the Home Affordable Refinance Plan (HARP). With the ability to refinance their mortgages at today’s lower interest rates, many homeowners are working their way toward a better overall financial situation.
All of these positive signs are especially significant on the heels of a cool winter selling season. As noted in the report, new- and existing-home sales both fell in February from January, dropping 1.6 and 0.9 percent, respectively; pending home sales also declined 0.5 percent.
To read the rest of the forecast, click here.