Birth rate predicts unusually slow recovery from current housing downturn

Interesting observations from the floor of the American Securitization convention courtesy of Housingwire, including analysts who believe that it will be sometime in the 2012 – 2015 time period before housing will recover:

“Much of the the Zelman presentation had data I’ve not seen discussed before, as well. Perhaps the most interesting was a discussion of how birth rates correlate with homeownership as a predictor of overall housing market demand. In particular, weak birth rates in 1991 – 1997 were predicted to correspond to poor housing starts during 2009-2015, confounding any recovery in the overall housing market.

“The economy has yet to feel the full repercussions of the housing downturn,” McGill concluded.

Freddie Mac’s Calvin Schure, director of economic analysis at the GSE, said that the U.S. economy is seeing a rare instance of “the tail wagging the dog,” and suggested that the current downturn in housing and the mortgage markets will likely take much longer to resolve than in other prominent durations of housing duress.

“This housing cycle is driven by different factors than other cycles we’ve had,” he said. The result, Shure said, will be “lingering credit quality issues” that will ultimately affect even the prime lending sector.”


2 responses to “Birth rate predicts unusually slow recovery from current housing downturn

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