Don’t expect the U.S.
housing market to get better anytime soon, an economist says.
Don’t expect the U.S. housing market to get
better anytime soon, an economist with a cement industry trade group said.
Edward J. Sullivan, chief economist for the Portland
Cement Association, said a meaningful recovery in home sales and construction will
not take place until mid-2010.
Sullivan expects another major upswing in
foreclosures as homeowners who took out unconventional adjustable-rate mortgages, such as those without income verification requirements and with optional
minimum payments, see interest rates reset.
“Housing construction
activity cannot begin until sales recover,” Sullivan said. “Increased
foreclosures, coupled with deteriorating labor markets and tight credit
conditions, will delay significant sales activity until mid-2010. Improvements
in housing starts are not expected to be significant until 2011.”
And although the efforts of
the federal government and many banks to rewrite so-called toxic mortgages is
expected to help, much more is needed, Sullivan said, adding things could get
worse.
“Without further government
cash injections into the banking system, tight lending standards could
characterize the economy and mortgage lending through mid-2011 dragging down
home sales,” Sullivan said. “Under such a scenario, the housing recovery and
overall economic recovery could be delayed significantly.”
